Home ›› 16 Apr 2023 ›› Front
The value added tax (VAT) on synthetic felt produced in the country might be decreased to 5 per cent from the existing 15 per cent in the upcoming budget for the fiscal year 2023-24, said sources from the National Board of Revenue (NBR).
Most of the districts in Bangladesh have fish farming projects or hatcheries. Farmers use fish feed during commercial cultivation. Banks of the ponds and hatcheries get damaged when fishes collect the feed. As a result, the banks of ponds collapse. Synthetic felt is widely used in remote areas of the country to repair those damaged banks of ponds.
Synthetic felt producers have been paying 15 per cent VAT at the supply stage after production. Synthetic polyester staple fibre, the main raw material to produce the felt, has been enjoying VAT exemption at the import and production stage for a long time.
In the budget for the fiscal year 2023-24, the VAT on synthetic felt at the production stage might be decreased to 5 per cent from 15 per cent, said NBR sources.
Industry insiders said synthetic felt is produced using synthetic polyester staple fibres. Plastic bottles are recycled to produce plastic granules or chips from which synthetic polyester staple fibre is produced.
A senior NBR official told The Business Post, “Hundreds of labourers earn their livelihood working with the companies producing polyester staple fibre. Besides, a huge number of educated unemployed youths in the country are involved in fish farming. As the synthetic felt product is used to prevent erosion of pond banks, reducing the VAT at the production stage will mainly benefit the marginal fish farmers. Moreover, foreign exchange spent to import the product will also be saved amid the ongoing dollar crisis.”
Industry insiders said synthetic felt has already taken place as a potential sector. Reducing the VAT on its production will pave the way to the expansion of the fisheries sector and the development of rural and agricultural infrastructure, in addition to solving the problem of unemployment and saving foreign exchange.
They said the current government has been providing incentives in various ways to encourage fish farming. Due to the reduction of VAT, farmers will be encouraged to use more synthetic felt in the repair of damaged hatcheries and pond banks. The price of the felt would increase if the additional VAT has to be paid which would create economic pressure on the marginal farmers.
According to the ‘State of World Fisheries and Aquaculture-2022’ global report of the Food and Agriculture Organisation (FAO) of the United Nations, Bangladesh ranks third in the production of freshwater fish and farmed fish. Earlier, Bangladesh ranked fifth for six consecutive years in farmed fish production.
A report by the International Food Policy Research Institute (IFPRI) said that 56 per cent of Bangladesh’s fish comes from ponds. Fish farming in ponds has increased by almost six times in the last three decades. About two crore people are involved in fish farming and business. In 1990, people used to eat 7.5 kg of fish per capita per year which has increased to 30 kg now.
If this initiative is taken in the upcoming budget, industry insiders and officials concerned hope, the fisheries sector will go further. It will be possible to create new export opportunities, eliminate unemployment, and meet the demand for protein at a low price in the country. It will improve the standard of living of the consumers as well as the businessmen.
