Though the federal government stated that it might cut back the taxes levied on the import of uncooked supplies used to make cement, this initiative is not going to have a passable impression as costs would stay the identical on the shopper stage, in accordance with market gamers.
Whereas saying the proposed nationwide finances for fiscal 2021-22 on Thursday, Finance Minister AHM Mustafa Kamal stated the advance revenue tax on uncooked materials imports for cement manufacturing can be decreased from 3 to 2 per cent.
Kamal additionally proposed that the tax deducted at supply on the availability of cement be reduce by 1 proportion level to 2 per cent, and to supply tax incentives for the business to make sure straightforward and price efficient infrastructure improvement within the nation.
“However this nominal discount is not going to profit customers as uncooked materials costs lately elevated within the worldwide market,” stated Mohammed Amirul Haque, managing director of Premier Cement.
In addition to, the transport prices have risen considerably over the previous three to 4 months, he added.
In response to Haque, the present transport value of 1 tonne of clinker is round $63 whereas it was $56 only a few weeks in the past.
“Because of this the worth of cement has elevated within the home market since mid-March,” Haque stated.
Equally, the rising pattern in worldwide transport prices started final November.
Only one-and-a-half months in the past, it might value about $20 to move one tonne of clinker on a mom vessel from Indonesia, Vietnam, and even the Center East, to Bangladesh.
“So, decreasing advance revenue tax and supply tax by 1 proportion level every is not going to convey an enough profit for customers,” Haque added.
Md Shahidullah, managing director of Metrocem Cement and first vice-president of the Bangladesh Cement Producers Affiliation (BCMA), echoed the identical.
“If the federal government decreased the import taxes to Tk 200 from Tk 500 per tonne of clinker, then customers can be benefitted,” he stated.
The value of every 50-kilogramme (kg) bag of cement lately rose by round 12 per cent, or Tk 50, to hit roughly Tk 450 — a improvement which is able to certainly push up development prices, be it for the federal government’s improvement initiatives or personal initiatives.
In opposition to this backdrop, cement makers have demanded the entire withdrawal of the inconsistent advance revenue tax imposed on uncooked materials imports because the impression of the tax concession given to the cement sector within the proposed finances could be very nominal.
“We’ll meet with officers from the Nationwide Board of Income to debate our calls for, together with the entire withdrawal of tax paid at supply on the availability stage,” Shahidullah added.
So far as the market gamers are involved, the taxes levied on uncooked materials imports has all the time been inconsistent and subsequently, is under no circumstances fascinating.
So, if not an entire withdrawal, then the taxes ought to not less than be made suitable.
The BCMA additionally demanded that the speed of withholding tax on cement provide, which has been proposed to be decreased from 3 per cent to 2 per cent, be withdrawn within the closing finances.
“The proposed tax cuts are nothing however unreasonable coercion for an business since we can’t say simply how a lot revenue it may make,” stated Md Alamgir Kabir, president of the BCMA.
“It is dependent upon the nation’s financial system, market system, demand and above all, competitors,” he added.
The BCMA chief went on to say that revenue and loss are decided after an audit by a government-designated physique, no matter whether or not it’s a listed firm or not.
“So, if the federal government thinks that advance revenue tax ought to be paid, we should have no objection,” he stated.
“However the revenue tax imposed mustn’t in the end be a legal responsibility in any means,” Kabir added.
At current, there are about 35 native and international cement corporations in Bangladesh.
The annual demand for the important thing development materials is about 4 crore tonnes in opposition to a manufacturing capability of 8.4 crore tonnes. Round Tk 42,000 crore has been invested within the business until date.
Furthermore, thousands and thousands of development employees and officers are each straight and not directly employed by the business, which deposits roughly Tk 5,000 crore to the state coffer by customs and taxes.
With a surplus in provide, regionally produced cement has been exported to many locations for greater than 15 years now.
The per capita consumption of cement within the nation at present stands at 210 kgs whereas it’s a whopping 1,700 kgs in China, 690 kgs in Malaysia, 620 kgs in Thailand, 517 kgs in Vietnam, 412 kgs in Sri Lanka, and 305 kgs in neighbouring India.