Business Report:
The recently introduced 2% advance income tax (AIT) on cotton imports, proposed in the national budget for FY2024-25, is expected to be withdrawn within the next 24 hours, according to Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell.
Russell shared the update with reporters on 7 July following a crucial meeting with Finance Adviser Dr Salehuddin Ahmed at the Secretariat. “We strongly protested the imposition of the 2% AIT on cotton imports, which is the lifeline of our spinning industry. The adviser acknowledged our concerns and understood how this would further burden the already struggling textile sector. We are hopeful that the issue will be resolved within 24 hours,” he said.
The textile industry, a key pillar of Bangladesh’s economy and the largest foreign currency earner, has been vocal against several fiscal measures in the proposed budget that they argue will jeopardize the competitiveness of local mills. Cotton, being the fundamental raw material for spinning mills, constitutes a significant portion of production cost. Industry stakeholders fear that the 2% AIT, coupled with increased VAT on yarn, would lead to an overall cost escalation, ultimately hurting exports and the broader supply chain.
Earlier, on multiple occasions, BTMA, along with other trade bodies, had urged the government to withdraw the AIT, arguing that it amounts to double taxation since businesses already pay tax on their income.
