Cement industry leaders demand zero AIT
In the proposed 2021-22 FY budget, the government offered to reduce AIT on cement industry raw material imports to 2% from 3%
Citing the relief proposed in the 2021-22 fiscal year budget insufficient, the leaders of the country's cement industry demanded a complete withdrawal of the advanced income tax (AIT) as it is not adjustable in cases of no profits.
The government proposed to reduce AIT on cement industry raw material imports to 2% from 3% in its latest budget.
"But it [AIT] is left adjustable like before which is unexpected," Bangladesh Cement Manufacturers Association (BCMA) said in a post-budget reaction statement on Saturday.
Keep updated, follow The Business Standard's Google news channel
"The industry wants complete removal of the AIT and if that does not happen, the government should at least make it adjustable," the statement added.
BCMA President Alamgir Kabir said "None of us knows how much profit or loss will be there ultimately as it depends on the economic and market factors. Firms post their audited accounts and there is no chance to deviate."
"Hence, the income tax in advance is an irrational imposition," opined Kabir who is also the managing director of leading cement exporter MI Cement Factory Ltd.
"Despite all these, if the government still believes that it should collect income tax in advance, we cannot disagree. But the amount should never be a part of the ultimate tax liability of the firms," he said.
The government also proposed to reduce the source tax during the supply of cement to 2% from 3% and the association also demanded abolishment of the tax.
The industry, alongside making the land self-sufficient in the crucial construction material, also has been exporting cement for the last one and a half-decade.
But the budget frustrated them as there is no direction for incentives against cement export or duty drawback, said BCMA president.
At present, Bangladesh's cement industry has around 35 manufacturers with an 8.4 crore ton annual production capacity against the existing annual local market demand for around 4 crore ton cement.
Nearly Tk42 thousand crore in investments in the industry created employment for hundreds of thousands of people directly and indirectly, while the industry's annual contribution to the national exchequer surpassed Tk5 thousand crore, according to BCMA.
