Jute millers seek tax exemption

FT ONLINE

The country's private jute millers have sought exemption of source tax on cash subsidy and Advance Income Tax (AIT).

In a recent letter to the Ministry of Textiles and Jute (MoTJ), Bangladesh Jute Mills Association (BJMA) also demanded a reduction in the price of Jute Batching Oil (JBO) to help run their units smoothly.

Earlier, the ministry had requested the National Board of Revenue (NBR) and Ministry of Power, Energy and Mineral Resources (MoPEMR) to take necessary measures in these regards. But there was no progress.

Being frustrated, the jute millers again requested the MOTJ to take up the issues with the authorities concerned so that they could consider their concerns and help survive the sector.

Presently, the jute goods exporters pay a 10 percent source tax on cash subsidy against their export earnings. They enjoy a 12 percent cash incentive on their export earnings.

The jute millers said they have long been demanding the withdrawal of the source tax on cash incentives. Instead, the authorities have increased it this fiscal year to 10 percent from 3.0 percent in the previous fiscal year, they mentioned.

When contacted, Abdul Barik Khan, secretary-general of BJMA, said export earnings from jute goods dropped significantly in the fiscal year 2018-19 due to lower demand in the international market.

The export of jute goods to the Middle East and Africa also declined drastically in recent years. On the other hand, India has imposed anti-dumping duty, he added.

He also said the MoTJ also requested the MoPEMR to reduce the price of JBO to Tk 68 from existing Tk 90 per litre. But the MoPEMR is yet to reduce the price, he added.

Export earnings from jute sacks and bags dropped by more than 32 per cent and jute yarn and twine by 20 per cent in the last fiscal year than that of the previous fiscal year, the Export Promotion Bureau (EPB) data showed.

The sector earned US$ 816.27 million in the fiscal year (FY) 2018-19 as compared to US$ 1.025 billion in FY 2017-18, according to the EPB statistics.

Bangladesh exports jute goods to 135 countries including China, Turkey, India, Sudan and Zimbabwe.

The country produces 7.0-8.0 million bales of raw jute each year. Nearly 40 million people are involved in this sector.