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Dhaka Tribune

BFFEA urges tax cut to face global competition

Update : 11 Apr 2014, 02:30 AM

Bangladesh Frozen Foods Exporters Association (BFFEA) has urged the government to lower the tax at source to 0.25% from existing 0.80% as the cost of fish production increased due to the scarcity of raw materials.

The leaders of BFFEA would also seek withdrawal of 5% advanced income tax on the cash incentives when they will place a proposal soon in a pre-budget meeting with the officials of the National Bureau of Revenue (NBR).

Urging the government to reduce the interest rates to 7% from 15%, senior vice-president of BFFEA Kazi Belayet Hossain said:  As the production cost has been increased due to the shortage of raw materials, the country’s frozen food sector has lost its competitiveness in the global market.

“As higher tax at source pushes the production cost of fishes and shrimps to a higher level, we are urging the government to reduce it to 0.25% for the sake of maintaining our competitiveness in the global market,” Belayet Hossain told the Dhaka Tribune.

Former BFFEA President Golam Mostafa said: The government provides 10% cash incentives to the exporters to catch the markets but it cuts 5% tax at source on incentives, which is conflicting with the essence of any incentive. Bangladesh is unable to compete in the global markets as our competitors including India, Thailand and Vietnam are exporting shrimps at cheaper prices.

Currently, only shrimp exporters are enjoying 10% cash incentives against the export-value.

BFFEA leaders also demanded 100% withdrawal of electricity and gas tariffs in line with other agro-based industries as they call it an agricultural industry.

In the first eight month of the current financial year, Bangladeshi frozen foods earned US$458m, which is 24.23% higher than the same period of last fiscal year’s value of $369m due to the increased price.

Of the total export value, shrimp has earned $396m, frozen foods $36m and the rest from others.

The government has set a target of $543.84m for the FY2013-14.

In 2012-13 fiscal year, frozen foods exports recorded 9% fall to $544m as fish production fell due to detected disease in prawn.

According to statistic of BFFEA, around 1.5 crore people are involved in the sector either directly or indirectly. Bangladesh exports around 60,000 metric tonnes shrimps to the world market against its production capacity of nearly 1.5 lakh metric tonnes. 

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