Bangladesh Textile Mills Association (BTMA) made the demands at an emergency press conference held at Gulshan Club in the city. There is a risk of serious disruption to Bangladesh’s primary textile industry, the Bangladesh Textile Mills Association (BTMA) recently cautioned, calling for urgent policy reversals to protect domestic spinning mills from collapse and maintain global competitiveness.
BTMA President urged the government to immediately withdraw the 2-per cent advance income tax (AIT) imposed on imported cotton and reduce corporate tax to 15 per cent from 27 per cent to avoid a crisis in the textile sector. They also urged the interim government to reset the 15 per cent corporate tax until 2028In separate letters to the finance and commerce advisers, the Bangladesh Bank governor and the chairman of the National Board of Revenue (NBR), BTMA president Showkat Aziz Russell said the newly imposed AIT, along with an increased specific tax on yarn, would severely disrupt domestic spinning mills and jeopardise the textile industry’s competitiveness.
The decision to raise the AIT was taken without consulting industry stakeholders and is likely to be ‘self-defeating’ for the sector and the wider economy, BTMA president said.”Although it may appear to aid revenue mobilisation, this AIT will significantly increase production costs and make local mills less competitive compared to regional counterparts. Textile mills, especially in the spinning segment, will not be able to survive under this pressure,” said BTMA President.
The BTMA warned that paying AIT on every shipment will lead to working capital shrinkage over time, with the cumulative tax burden potentially reaching up to 29 per cent annually. If this continues, the industry’s working capital could deplete entirely within three years, the association cautioned.
Bangladesh does not produce cotton and is entirely dependent on imports, it said, noting that domestic mills have the capacity to supply cent per cent of yarn for the knit sub-sector and 55-60 per cent for woven apparelsBTMA leaders also said.
The new impositions come at a time when the textile sector is already reeling from a multitude of issues, including: Abnormal increases in gas and electricity pricesSignificant reductions in cash incentives for exportsUninterrupted energy supply shortagesPersistent currency devaluation.
Their other demands included the exemption of specific tax of Tk 5 per kg at the production stage on cotton yarn, synthetic fibres and other fibres produced by domestic textile mills.BTMA Directors Khurshed Alam, Abdullah Al-Mamun, Vice President Saleuzzaman Khan, Badsha Mia, and Mohammad Ayub, along with former President of the Cotton Association Hossain Mahmud, Home Textile Association representative, and BKMEA Vice President Amal Poddar were present at the press conference.
