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26 June, 2019 10:09:03 AM

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Proposed tax to take its toll on steel industry

Manufacturers demand withdrawal
UNB, Dhaka
Proposed tax to take its toll on steel industry

Three trade bodies in the steel manufacturing industry have demanded the withdrawal of proposed taxes on different stages of steel rod production and sale.

Instead, they proposed to pay Tk 2,250 as fixed VAT in place of the existing fixed VAT of Tk 1,400 on production and sale of steel rod.

The three bodies - Bangladesh Steel Manufacturers Association (BSMA), Bangladesh Re-rolling Mills Association (BRRMA), and Bangladesh Steel Mills

Owners Association (BSMOA) - placed the demands at a joint a press conference at National Press Club in the capital yesterday.

In a prepared statement, BSMA Secretary General Muhammad Shahidullah said they have to pay about Tk 10,350 incremental taxes if the new VAT and other taxes come into effect.

This will substantially push the prices of steel rods to Tk 73,000-75,000 from the existing Tk 63,000-65,000 per metric ton (MT).

According to the steel manufacturers, now Tk 1,400 per MT VAT is applicable to MS rod sales. Of this, Tk 300 is VAT on scrap, Tk 450 fixed VAT on billet sales, Tk 450 on MS rod sales and Tk 200 VAT on retail sales.

But in the proposed budget, Tk 1,750 was proposed as VAT on scrap at a rate of five per cent, Tk 2,000 as VAT on billet

sales, Tk 2,000 fixed VAT on MS rod sales and Tk 3,300 on retail sales.

As a result, they said the overall cost will go up by Tk 7,650 per MT while they will have to pay another Tk 4,650 as advance income tax (AIT) at different stages against the existing Tk 1,950.

This means that the additional expense will go up by Tk 2,700.

The leaders said that as per their new proposal, if the government imposes Tk 2,250 as VAT instead of existing Tk 1,400, the government will get Tk 850 from per MT of steel rods which will be a 61 per cent increase.

Through this hike, the government will earn Tk 467.50 crore as VAT from the steel sector as the country annually produces about 5.5 million MT of steel rods.

Similarly, the leaders proposed to impose AIT at Tk 300 against each MT of steel rods.

They said about 3,600 types of different industries including the construction sector

are involved in the steel industries which will be directly or indirectly affected by the new proposed tax structures.

They said the new taxes will also create a big pressure on the banking sector as well as the millers who depend on banks for financing.

BSMOA founding President Sheikh Masadul Alam Masud and other leaders of three associations were present at the press conference.

BK

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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