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The government has reduced the rate of advance income tax (AIT) on import of cement raw materials to 3.0 per cent from 5.0 per cent.
National Board of Revenue (NBR) issued a SRO (statutory regulatory order) in this regard on Thursday, following a recent demand by the cement makers.
The cement manufacturers appreciated the decision, but still demanded full waiver of the AIT.
“The cut reflects that the government has realised the problem of the sector,” Bangladesh Cement Manufacturers Association (BCMA) president Mohammed Alamgir Kabir said in a statement. He said the 3.0 per cent AIT is not realistic and demanded full waiver of the tax.
Recently, the cement makers demanded waiver of 8.0 per cent non-adjustable AIT imposed on imported raw materials and supply of products to ensure the sustainable development of the industry.
They said the gross profit of the cement industry declined as compared to previous years and it will be a question of survival if the 8.0 per cent AIT is not waived.
According to the manufacturers, a company will have to make 40 per cent gross profit if it has to survive against 8.0 per cent AIT. But it is quite impossible.
Total investment in cement sector stood at around Tk 300 billion, of which Tk 190 billion came through bank loans.
Presently, 38 companies, including two multinationals, are manufacturing cement for local and overseas markets. Of the companies, seven are listed on the stock exchanges.
The listed companies are Aramit Cement, Confidence Cement, Heidelberg Cement Bangladesh, LafargeHolcim Bangladesh, Meghna Cement Mills, M. I. Cement Factory and Premier Cement Mills.
The overall production capacity of the sector has crossed 62 million metric tonnes per year against the demand for 34 million metric tonnes with 43 per cent overcapacity.
(FE)
