The Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA) has urged the country’s government to bring all leather exporters into the 10% cash incentive scheme.
The incentive is currently only available to exporters who process their leather at the Leather Industrial Park in Savar. The organisation made the demand recently in submitting their proposals for the next budget to the National Board of Revenue (NBR).
Md Jainal Abedin, the association’s secretary, said there were some industries outside Dhaka, but they are not able to avail themselves of the incentives.
They see it as a kind of discrimination, he told the Dhaka Tribune. The association mentioned in its proposal that the government is now providing a 5% cash incentive to those processing leather goods at the industrial park in Savar. They demanded the cash incentive be increased to 10% in the next fiscal year.
“Many of the entrepreneurs could not avail the incentives as the they could not commence production after shifting from Hazaribagh,” Jainal said.
He said exporters outside of Dhaka were being deprived of the incentive.
To promote processed leather exporters across the country, the BFLLFEA has urged the government to ensure the incentive is available to all, without discrimination. The association has also sought source tax exemption in the upcoming 2019-20 budget, to protect the sector which is fully export oriented.
Traders said if the government withdraws the source tax, the sector will develop rapidly. As it stands, exporters in the sector have to pay 0.60% tax deducted at source, when shipping their products.
The entrepreneurs have also demanded a uniform policy for all export-oriented sectors with regard to duties and other taxes, so that the leather sector can enjoy more benefits.
“Some sectors are provided high privileges, depriving others. It should be uniform for all sectors,” the proposal said.
“Now we need product diversification to increase exports and reduce risk. For that, sectors with potential such as the leather industry, should be promoted like the RMG sector, and a uniform policy is needed for that,” Jainal remarked.