Tk200 more import duty proposed on clinker imports

In the proposed budget for FY24 presented in the national parliament on Thursday, the government has proposed to increase the duty on the import of clinker – the main raw material for making cement – from Tk500 to Tk700 per tonne, which experts said would put the sector in more crisis as imports of clinker have already fallen by more than half due to the dollar crunch.

If the increased duty becomes effective, the price of each 50-kg bag of cement will surge by Tk15, said Md Shahidullah, first vice president of Bangladesh Cement Manufacturers Association (BCMA) and managing director of Metrocem Cement Ltd.

"Due to the dollar crisis, we can only import 40% of our clinker requirements. This has slowed down the pace of infrastructure development in the country, including a negative impact on mega projects. In such a crisis, if the government increases the import duty by Tk200, the production cost of 50-kg bag cement will hike by Tk15," he added.

"We proposed to the government to reduce the import duty from Tk500 to Tk200 to solve the crisis in the cement industry, but on the contrary, the government has proposed to increase the import duty," he said further.

Besides, it has been proposed to increase the specific rate of duty from Tk750 to Tk950 for commercial importers.

Md Shahidullah hoped the government would consider their proposal seriously, and even if it is not possible to reduce the duty, the government keeps the previous one of Tk500.

Regarding the Advance Income Tax (AIT), Shahidullah said their strong demand was to reduce AIT from 3% to 0.5%, which has not been reflected in the budget proposal.

There are 34 cement factories in Bangladesh, including four multinational ones. Currently, different brands of cement are being sold at Tk520 to Tk550 per bag.

The BCMA proposed to reduce import duty per tonne on the import of clinker in a pre-budget discussion with the National Board of Revenue last February.

The association proposed to reduce the current AIT on the import of clinker, slag, limestone, fly ash and gypsum – the main raw materials for cement production. Apart from this, BCMA demanded the withdrawal of a 30% supplementary duty on limestone imports.