Home ›› 17 Jun 2020 ›› World Biz
Steel manufacturers expressed frustration over the proposed budget for the fiscal year 2020-21, saying that most of their proposals were ignored which they thought would not help overcome their crisis created after the coronavirus outbreak.
“We have already communicated our reactions and observations through different chamber bodies to the authorities concerned,” said a top leader of Bangladesh Steel Manufacturers Association (BSMA).
The leading trade body had proposed to lower the value-added tax (VAT), advance tax, advance income tax (AIT) and regulatory tax in order to bring the prices of their products at the consumers level.
They urged the authorities concerned to take up their issues and help address those accommodating the suggestions in the current finance bill.
The manufacturers said the mild steel (MS) rods are now selling between at Tk 52,000 and 58,000 per tonne in the country.
But after the coronavirus outbreak across the country, the local steelmakers had to shut down their factories following instructions of the government that lasted for two months.
“The two-month-long shutdown has resulted in huge losses in our business, which is almost impossible to recover soon”, said Sheikh Masadul Alam Masud, a top leader of BSMA.
The tax-related issue will put the steel industry in a dire strait if those are not addressed soon, he added.
Civil construction experts believe any crisis of MS products will have a spillover effect on other sectors of the economy as well.
Masud said during the general holidays, many factories were shut down, but their workers had to be paid which created a big burden on the factory owners.
About the tax regime, steel manufacturers said they have to illogically pay Tk 1,000 to Tk 2,000 as VAT deduction at source (VDS) for each tonne of MS billets or rods.
They said some irrational taxes on import of raw materials which ultimately increases the production cost.
The steel manufacturers said advance import duty on MS scrap was imposed at 4 per cent which exceeds the VAT amount creating a huge refundable fund with revenue department thus ultimately creates a working capital shortage.
They also urged the government to treat the supply product against international tender as export as the payment is made through foreign currency in this regard.
The steel manufacturers also called for reductions custom duty on import from 15 per cent to 5 per cent and increase the import duty on some products used in the industries like ACSR Wire, PC Wire, welding electrode, and mould powder to protect the local industries.
Steel manufacturers said steel is one the most prominent industries in our country that are meeting 100 per cent of total national demand which is more than 8 million metric ton annually and contributing 2.2 per cent to the GDP.
More than 3,00,000 people directly working in more than 200 companies belong to this industry and its total contribution to the national exchequer is around Tk 9,950 crore which is 2.84 per cent of the national government revenue in 2018-19, it added.
The steel manufacturers said the industrial loans are increasing day by day which is around Taka 30,000 crore and a huge interest liability will remain even at reduced rates of interest which the government has allowed.
It will be impossible for the industry to pay back the loans in time due to very low sales, said the BSMA leaders.
(Source: UNB)
