Ctg businesses urge addressing inflation, tax harassment, investment climate

Bringing stability to the economy by reducing inflation in the upcoming fiscal 2024-25 is a significant challenge for the government.

To address the crisis, businessmen in the steel, cement, and shipbreaking sectors have proposed various initiatives for the upcoming budget.

These include creating an investment-friendly business environment, stopping the harassment of businessmen, cancelling the advance income tax, and expanding the tax net.

Steel industry needs AIT exemption, long-term loans

Bangladesh Steel Manufacturers Association (BSMA) President Mohammad Jahangir Alam has called for the exemption of advance income tax (AIT) or proper adjustments at the end of the fiscal year.

He  told The Business Standard that the customs authority imposes a duty of Tk1,500 and a 3%-5% AIT on imported raw materials. "Income tax is applicable when we make a profit. If we incur a loss, how can we pay income tax? Yet, we have to pay AIT regardless of profit or loss."

"Furthermore, we seek a reduction in the import duty from Tk1,500 to Tk500 per tonne to adjust prices more effectively," he added.

According to Jahangir Alam, who is  also the chairman of GPH Ispat Group and Crown Cement Group, the cost of steel production has risen significantly in recent years due to several factors, including a 30% increase in electricity prices, a 300% rise in gas prices, and a 30% rise in the dollar price.

He said, "The rise in the dollar price has caused significant capital losses over the past year. We request the government to provide 15-year long-term loans to allow timely repayments."

"We urge the government to stabilise the dollar price to prevent banks from charging extra," he added.

Reduce loan dependency to control inflation

Amirul Haque, managing director of Premier Cement, demanded the government to play a role in reducing the inflation rate in the upcoming budget.

Mentioning that manpower export should be increased by stopping the harassment of expatriates at airports, he said, "While the laws are being changed to secure $4.5 billion from the International Monetary Fund (IMF), there is no comprehensive policy in the manpower sector, which generates more than $20 billion."

Stating that the AIT hinders the progress of businessmen and industrialists, Amirul Haque said, "In the upcoming budget, I propose reducing AIT to 0.50% on the import of cement raw materials, including clinker, slag, limestone, fly ash, and gypsum."

"Additionally, we have written to the National Board of Revenue (NBR) requesting a reduction of AIT from 2% to 0.50% at the sales level," he added.

Expand tax net, stop harassing businesses

Omar Hajjaz, president of the Chattogram Chamber of Commerce and Industries, said even though most of the country's population lives in villages, the tax net has not been extended there.

"Despite the presence of significant business establishments, only city-based businessmen are being taxed. This situation is causing frustration among businessmen and disappointment among taxpayers," he told TBS.

On the challenges faced by businessmen,  he said, "Traders are being harassed due to the HS (Harmonised System) code in importing and exporting products. The NBR is fining traders two to four times due to these complications."

"We expect clear instructions in the next budget about ensuring customs valuation and the assessment of product value according to the standards of the International Trade Organisation. Additionally, the imposition of 200% to 400% customs fines for minor and unintentional mistakes should be stopped," he said.

End double duty on scrap ships in the budget

Mohammad Zahirul Islam, vice-president, Bangladesh Ship Breakers and Recyclers Association, said ship recycling yard owners currently pay an import duty of Tk1,500 for per tonne of light displacement tonnage (LDT), which includes generators and other fittings on the scrap ship. 

"However, despite this payment, additional duties are being levied separately on these items.

This results in importers being taxed twice on the same items," he said.

He added, "We urge the government to eliminate the unreasonable duty on generators and other fittings beyond the LDT duty and to include clear instructions for this change in the next budget."

He said in 2008, the Chattogram Customs Authority issued a notification to determine duties for furnace oil, lube oil, and diesel oil, which were collected accordingly. However, for the last 5-6 years, customs authorities have not adhered to this notification.

"They have withdrawn the 40% depreciation facility for used lube oil and imposed a tariff rate of $2,000 per tonne, resulting in a duty of around Tk1,10,000 per tonne. We request that the NBR reintroduce the 40% depreciation benefit from the 2008 general circular in the next budget," he said.