Bangladesh cement producers demand income tax withdrawal

Bangladesh’s cement manufacturers have urged the government to withdraw the advance income tax (AIT) and high customs duty levied on clinker imports in order to ensure the industry’s survival.

In a post-budget press briefing led by the Bangladesh Cement Manufacturers Association (BCMA), the industry argued that the non-adjustable AIT (advance income tax), which is authorised under two subsections of income tax ordinance, is 'unjust' as a company has to pay this tax even if it incurs a loss.

During the briefing, the BCMA explained that the industry is facing heavy losses due to the impact of the ongoing coronavirus pandemic. Moreover, in addition to the AIT, the import duty on raw materials is placing a further cost burden on manufacturers, raising production costs and reducing profitability.

BCMA President Alamgir Kabir said, “We had requested the government to remove the three per cent import duty on raw materials, three per cent non-adjustable AIT and reduce the import duty on clinker to at least BDT300/t [USD3.53/t] from the existing BDT500/t [USD5.88/t] in pre-budget proposals”.

“We are really frustrated that our demands were unaddressed in the proposed budget,” he said.

“If the government does not remove the three per cent non-adjustable income tax, then at least it should be declared as adjustable tax”, he added.

The president said the cement manufacturers experiencing a severe drop in revenues following the nationwide lockdown over the last two-and-a-half months, when almost 90 per cent of factories had stopped production.

“Affected by the coronavirus pandemic, the sector counted a loss of about BDT3000 crore from March 26 till now”, he added.