Cement makers call for reconsidering duty hike on clinkers

The customs duty (CD) on clinker, the main raw material for cement, has been increased from Tk 500 per tonne to Tk 700 in the proposed budget for the next fiscal year, leaving manufacturers disappointed.

Cement manufacturers have long demanded the CD on clinker be reduced from Tk 500 per tonne to Tk 200.

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The CD on key raw materials of any industry is usually around 5 per cent of the import value. But it will stand at 12 per cent to 13 per cent because of the hike proposed in the budget, said Alamgir Kabir, president of the Bangladesh Cement Manufacturers Association (BCMA).

"It will put additional pressure on customers and may lead to a slowdown in overall construction activity. We are humbly requesting the government to take steps to reduce the CD."

He made the comments while addressing a post-budget press conference styled "Additional Tax Burden and Other Impediments: Cement Industry in Deep Crisis" at the Hotel Purbani International in Dhaka yesterday.

Apart from the import stage, a 2 per cent advance income tax (AIT) is levied at the sales stage and it is considered as the final tax liability, said Kabir, also the vice-chairman of Crown Cement PLC.

"We have been demanding for a long time that AIT can be a maximum 0.50 per cent and it would not be appropriate to consider it as a final tax liability.

Therefore, we are requesting the government to offer the opportunity to adjust the AIT."

According to Kabir, since manufacturers pay AIT on raw materials at the import stage, the AIT at the sales stage is equivalent to double taxation.

He said during the pre-budget discussion in February, the BCMA requested the National Board of Revenue (NBR) to consider the matter and the tax authority verbally assured the trade body that the AIT issue would be taken care of.

"Unfortunately, the proposed budget did not reflect the assurance."

About 35 local and foreign companies are currently producing cement in Bangladesh and they have collectively invested around Tk 40,000 crore.

More than Tk 6,000 crore in taxes are collected annually from the sector, according to the BCMA.