Local packaging industry employees have demanded four changes to the proposed budget – including reducing the import duty on raw materials to five percent from the proposed 15 percent.
In this regard, six organisations of packaging and printing businessmen have sent letters to the finance ministry, National Board of Revenue and Federation of Bangladesh Chambers of Commerce & Industries.
While defending the demands, the organisations say they import paper and paper board, liner and medium paper as raw materials since the local supplies are substandard. These raw materials are used for packaging products for export.
"In a very competitive market, no factory will be able to continue business paying the proposed 15 percent import duty on raw materials. Therefore, the rate should be fixed at five percent," they said.
Additionally, carton manufacturers said even the plastic packaging manufacturers pay five percent import duty on raw materials.
Local Carton Manufacturers Association President MA Basar Patwary said the local manufacturers fall under small and medium-sized enterprises (SME) and the labour-intensive industry category.
"Changing the tax structure for packaging affects nearly 20 lakh people who are dependent on the sector. We hope our demands will be met to salvage the packaging industry," he added.
In the second demand, the organisations advocate for 15 percent uniformed value-added tax (VAT) on raw materials as the paper manufacturers enjoy duty exemption on raw material imports.
The carton makers say availing waivers or exemptions as an SME is tough, and therefore the facility creates uneven market competitiveness where the major players keep ruling the market.
In the third demand, the organisations said tax at source (TDS) is hurting local manufacturers.
"Our net income in the too-competitive market is not more than five percent. For us, two to five percent TDS is unacceptable," they argued.
On the fourth and last point, the local packagers sought effective measures so that the major market players cannot evade VAT. On top of this, the organisations demanded reinstating waivers for the local packagers.
Apart from Local Carton Manufacturers Association, the other five organisations are the: Printing Industries' Association of Bangladesh, Bangladesh Paper Merchants' Association, Bangladesh Paper Importers' Association, Bangladesh Textbook Printers' and Distributors' Association, plus the Chittagong Papers and Cellophane Business Group.