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Remove VAT on scrap RMG fabrics and fibers made from it, urges BTMA


Bangladesh Textile Mills Association (BTMA) has urged the government to remove the 7.5 per cent VAT on scrap RMG fabrics and 15 per cent VAT on fibers made using such scraps from the budget for FY25.

The resulting total 22.5 per cent VAT on these RMG scraps makes them unfeasible to be used to turn into fibers, says Mohammad Ali Khokon, President, BTMA.

These scraps are currently being used to 1,200 million kg of fiber worth $4 billion each year, he adds. The association currently imports such fiber from abroad using foreign currency.

Khokon also demanded the withdrawal of the 5 per cent VAT on man-made fiber, and 5 per cent advance tax, as well as 5 per cent advance income tax on flax fibre.

He also requested for a reduction in the RMG source tax from the current 1 per cent to 0.5 per cent for the next five years.

During his speech, Khokon said, the textile and clothing industry currently faces issues due to the dollar crisis, inadequate energy supply, and the interest rate hike.

He demanded for the retention of the corporate tax until 2030. He also called for a withdrawal of the fine for an error in the HS as stated in the 171 Clause of the Customs Act-2023.


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