Written by The Banking Post
The Bangladesh Textile Mills Association (BTMA) has urged the interim government to revoke the newly imposed 2% advance income tax on cotton imports, warning the measure could cripple domestic mills’ competitiveness and working capital.
Tax’s Impact on Production Costs and Liquidity
- BTMA President Showkat Aziz Russell said the levy, introduced without stakeholder consultation, will push up raw‐material costs and erode mills’ operating funds.
- Since the advance tax applies to every consignment, Russell estimated it could amount to a 29% annual tax burden, depleting working capital within three years and leaving factories unable to sustain production.
- He cautioned that higher local costs would open the market to cheaper imports, reducing Bangladesh’s export value and undermining job creation in the textile sector.
BTMA’s Three Key Demands
- Immediate Repeal of the 2% Advance Tax
- Cotton has historically been duty‐free. The new tax, BTMA argues, will hamper an import‐substitute industry.
- Extension of the 15% Corporate Tax Rate
- The current concession for textile manufacturers expires in June. Ending it would add further strain on margins.
- Abolition of the Tk 5/kg Production Tax on Yarn
- Applies even to blended or synthetic‐fibre yarns; BTMA labels it “a fresh blow to struggling mills.”
Showkat warned, “The economies of competing countries will benefit from our weakened mills, while local value addition and employment suffer. We need swift policy action to safeguard Bangladesh’s primary textile industry.”
