Plastic goods exporters seek 1% import duty on machinery, parts in FY26 budget
They made 15 demands for boosting the country’s plastic sector
Highlights
- Plastic exporters also demand:
- Only a 5% VAT on plastic tableware, kitchenware & household items
- Tariff hike on imported toys, goods to protect the local industry
- Removal of 5% VAT on ballpoint pens at the production level
The Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) has urged the government to reduce the import duty on machinery, parts, and raw materials for export-oriented plastic industries to 1% in the FY26 budget.
The association placed 15 proposals concerning the plastic sector during a press conference at the Paltan Tower office in the capital today (18 June).
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Leaders of the organisation said currently, members of apparel and textile sector associations such as the Bangladesh Textile Mills Association (BTMA) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) enjoy only 1% import duty on machinery, along with exemptions from VAT and other duties.
Currently, plastic exporters have to pay import duties ranging from 10% to 25% on machinery and parts. BPGMEA argued that extending the same benefit to plastic manufacturers would help the sector become more self-reliant and globally competitive in exports.
BPGMEA President Shamim Ahmed presented the demands at the event, stating that the plastic industry is one of the country's most promising sectors.
"To enhance skills and production capacity, increased use of machinery and modern technology is essential. But due to complications with duties and VAT, many companies are discouraged from importing new machinery," he said.
He also said that nearly all plastic manufacturing units have suffered over the past one and a half years due to the ongoing energy crisis, with many forced to shut down.
Shamim Ahmed said that tableware, kitchenware, and household items made from plastic currently face a VAT rate of 5% to 7.5% at the production level. However, there is a proposal to increase it to 15%, which would put pressure on low- and middle-income groups. Therefore, he demanded that the VAT be kept at 5%.
He said that although the prices of raw materials for toys have increased in the international market, the proposal to raise the tariff value of imported toys has not been considered. As a result, low-quality, cheap toys may flood the domestic market, harming the local quality toy industry and leading to the wastage of foreign currency.
The BPGMEA president said that Bangladeshi toys have long been exported abroad, and the sector also provides employment for women workers. Hence, he called for an increase in the tariff value of imported toys.
Shamim Ahmed further said that internationally standard plastic products are being produced in the country and exported to over 50 countries. Yet the proposed budget for FY26 suggests reducing the supplementary duty on imported plastic goods, which poses a threat to local industries. He urged the government to increase duties instead.
He also mentioned that chillers and other machinery are crucial for the plastic industry. Government concessions on such equipment have helped industrial growth and increased employment opportunities.
Finally, Shamim Ahmed said that although ballpoint pens are educational materials, there is a 5% VAT at the production level. While VAT is waived at the business level, it still applies to production. Removing this VAT would help boost local production and exports.
