Excess source tax burdens remain for steel industry

In the proposed budget for fiscal year 2023-24, there has been no change in the duty, VAT, and income tax on the import of raw materials for the country's steel and shipping industry.

This means more tax is collected at the source of scrap import and sales of finished goods than the actual payable amount by the business for a fiscal year.

The provision to adjust excess tax for the industry should also be implemented in the next fiscal year.

A huge amount of tax will be lapsed as the adjustment period of source tax remains unchanged in the proposed budget. It will limit the carry-forward scope for the sector in the next fiscal year, resulting in working capital choking.

There is a shortage of raw materials in the international market. As a result, the price of rods is increasing in the country's market.

At this critical time, taxes need to be reduced. If the duties and taxes are reduced, it will be possible to adjust the price in the market.

In pre-budget discussions, the steel sector had demanded reduction in import duty, VAT, and income tax applicable to the import of raw materials scrap from the steel industry so that prices would decline at the consumer level.

Shahriar Jahan Rahat, deputy managing director, KSRM Group