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BTMA demands scrapping of 0.30pc tax for textile mills in Budget 14-15

imagesBangladesh Textile Mills Association (BTMA) has demanded scrapping of the newly-proposed provision of 0.30 percent minimum tax for the textile mills in order to maintain the industry’s competitiveness.

“We thank the finance minister for retaining existing facilities and incentives for the sector. But we don’t see any reason for imposing 0.30 percent minimum tax on textile mills as their income taxes are assessed at the year end,” a BTMA release says. “We think this would create complexities in paying income taxes,” the release added.

The trade body also demanded full withdrawal of duties and taxes on pet chips, synthetic filament tow or acrylic tow, lyocell fibre and flux fibre, though the budget proposed to cut duty on import of lyocell fibre and flux fibre. Besides, BTMA demands include exemption from paying 3 percent income tax at source both for purchasing materials through local letter of credit, and receiving cash incentives from the government.

In 2014-15FY’s budget, the finance minister has proposed to lower advance income tax (AIT) to 3 percent on textile mills’ local LC purchases over Tk 5 lakh, from the current provision of paying 5 percent AIT on such purchases. But the textile millers said such provision will dent financial capabilities of big industries like textile mills and squeeze their capital.

BTMA argued that textile mills sometimes go for temporary purchase of cotton, yarn, fabric and other necessary material through local LCs, the amount of such LCs usually crosses Tk 1 crore mark. So, the new proposal of sparing purchases under Tk 5 lakh would not actually benefit textile mills, it said. About the provision of paying 3 percent AIT on 5 percent alternative cash incentives for textile sector, BTMA said the 5 percent incentives eventually stand at 3.75 percent after paying different charges.

Source: Daily Sun

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