Bangladesh Textile Mills Association (BTMA) has proposed several measures to tackle the ongoing financial crisis in textile industry.
The BTMA proposed to waive VAT (value added tax) on all kind of yarn as the industry lost around Tk20,000 crores during general holiday announced by the government to curb the spread of Covid-19, says a press release.
The organisation has also proposed to increase the existing Alternative Cash Assistance from 4% to 10% for 6 months to compensate the loss faced by the export oriented textile mills because of the aggressive promotional strategy taken by the competing countries.
A fixed Tk6 ad valorem VAT has been proposed to impose on man-made fiber produced yarn which the organisation think will not benefit the related textile mills due to the dearth of the export orders of Yarn and buyer shortfall, the textile mills are suffering.
Thus, the organisation urged to reconsider the proposal and impose Tk2 ad valorem VAT on every man-made fiber produced yarn.
In order to stop unethical trade and to protect the fair interests of the domestic industry, earlier BTMA proposed to change the tariff structure of some Harmonised System (HS) coded fabric. However, the budget does not reflect this, therefore, BTMA urged to consider the matter.
Besides, the organisation thinks a 0.5% withholding tax on export prices of all types of readymade garments, will be challenging for the textiles and readymade garments to survive in the international market in the Covid-19 context.
Thus it requested to fix the rate of withholding tax at the previous rate of 0.25%.