Call grower to reinstate steel import tax
Staff Reporter :
Entrepreneurs from the steel sector have strongly demanded the reinstatement of the previous 5pc advance tax at the import stage for all types of steel. They stated that the 2025–26 national budget has increased the advance tax from 5pc to 7.5pc, pushing the iron and steel industry towards disaster.
On Wednesday, during a press conference held at the headquarters of the Bangladesh Iron and Steel Importers Association, the organization’s president, Abuzar Giffari Jewel, called for the withdrawal of the increased advance tax. Senior Vice President of the association and former FBCCI director Amir Hossain Noorani, General Secretary Alhaj Nasirullah, and others also spoke at the event.
In his written statement, Abuzar Giffari Jewel said: “We import mainly secondary quality steel, which serves as raw material for nearly 2.5 million small, medium, and large industries across the country. Many countries around the world commercially import secondary quality steel sheets and coils as raw materials for their iron and steel industries. Since Bangladesh has no iron mines or ore deposits, we must rely on imported raw materials.
The 2025–26 national budget brought an amendment to sub-section 2 of section 31 of the VAT and Supplementary Duty Act, 2012. In the previous budget, a 5pc advance tax was applicable at the import stage.
This has now been increased to 7.5pc, which is a deliberate, industry-destroying decision. Due to this, all imported products are now subject to 7.5pc advance tax, pushing our secondary quality steel business to the brink of closure. We will suffer serious financial losses and face an existential crisis. To save the industry, the increased advance tax must be withdrawn.”
Amir Hossain Noorani said that to sustain the steel sector, both the advance tax and regulatory duty must be withdrawn. He also emphasized that the VAT law needs to be simplified to stop the harassment of businesses.
He explained, “The average invoice value of one ton of our steel coil/sheet is around USD 560, but it is assessed at USD 680 for customs clearance—USD 120 higher than the actual price. With 15pc VAT and 5pc advance tax, VAT is being collected based on added value at the local level, which is a deviation from the VAT system. If the local value addition is 33.34pc, then for a purchase price of BDT 114,000, BDT 38,000 has to be added locally. Therefore, the sale price (excluding VAT) becomes BDT 114,000 + 38,000.
If the local value addition is 50pc, then for the same purchase price of BDT 114,000, BDT 57,000 must be added locally, resulting in a VAT-excluded sale price of BDT 171,000. In this case, the price per ton increases by BDT 19,000 (171,000 – 152,000). A 50pc rise in value addition at the local level will increase the working capital requirement for traders. He warned that in cases where local value addition is less than 50pc, there will be substantial VAT refund claims. However, due to lack of transparency in accounting, most importers will not be able to claim these refunds and will face financial losses.”
“In the name of revenue collection,” he continued, “nearly 400,000 labor-intensive small, medium, and large factories are now on the verge of collapse. Thousands of traders involved in this sector may permanently disappear from the business landscape of Bangladesh. Around 2.5 million jobs will be lost, severely affecting the economy.”
Alhaj Nasirullah said, “In the interest of our livelihoods, to protect over 400,000 small and cottage industries, and to safeguard 2.5 million jobs, we strongly appeal for the reinstatement of the previous 5pc advance tax on secondary quality steel at the import stage. Otherwise, to realize our rightful demands, we will launch a large-scale movement involving all shops, cutting centers, and small, cottage, medium, and large industrial units in areas including Mirhajibagh, English Road, Nayabazar, Namapara, French Road, Bangshal, Dholai Khal, Dayaganj, Postogola, Shoshan Ghat, Keraniganj, Shamsabad, and Nawab Yusuf Road in the capital.”