BCMA calls on government to lower customs duty on clinker

The Bangladesh Cement Manufacturers Association (BCMA) has urged the country’s government to reduce the customs duty on clinker. Cement producers are currently required to pay a duty of BDT500/t (US$4.61/t) on imported clinker. The government has proposed to increase this to BDT700 in its budget for the next fiscal year. Alamgir Kabir, president of the BCMA, says the association has been campaigning for a reduction in the customs duty for some time now, in the hope of lowering it from BDT500/t to BDT200/t so this latest move by the government is “very disappointing”, reports The Financial Express. 

“Additional duty is a blow for the sector which is already reeling from a high tax burden, energy crisis, increase in transport fares, and dollar shortage,” said Mr Kabir, who is also chairman of Crown Cement. “But the customs duty on clinker stands at around 12 per cent to 13 per cent of the import value because of the recent budget announcement on clinker levying a customs duty of BDT700 per metric tonne. Thus, 12 per cent to 13 per cent customs duty on the import value of key raw materials is considered disproportionate to the cement industry owners and its detrimental effect may put additional pressure on the consumer-general in the cement market and may lead to a slowdown in overall construction activity.” 

“We have been demanding for a long time that at the import stage, primarily advanced income tax (AIT) can be levied at a maximum of 0.50 per cent, but it would not be appropriate to consider it as a final settlement. Therefore, we have been applying to open up the opportunity to adjust the AIT,” added Mr Kabir. “Also, since cement manufacturers have already paid AIT on raw materials at the import stage, paying AIT at the sale stage is equivalent to double taxation.” 

He also pointed out that the current dollar crisis is making it more difficult to import raw materials, leading to higher import costs, while the ongoing energy crisis and gas shortage has pushed production costs even higher. Considering the current situation, he urged the government to treat the cement sector as a “priority sector”.