Rubber growers have demanded withdrawal of VAT levied on both imported and locally produced raw rubber to help the sector grow further.
"The current budget imposed 15 per cent VAT on us. This threatens to hold back the sector's growth," Syed Moazzam Hossain, president of Bangladesh Rubber Garden Owners Association (BRGOA), told the FE.
Local planters sell rubber latex as sheet for the industrial use, which is a perishable item, he said.
"Sandal made of raw rubber is VAT free. But we producers have to pay VAT," the association chief said.
Since 1991, domestic producers were kept out of the purview of consumption taxes, said officials at Bangladesh Forest Industries Development Corporation (BFIDC).
He said imposing VAT on raw rubber is "unfair" as the government has withdrawn VAT from all agro-based products such as rice, jute, potato, tomato to give a boost to the sector.
Rubber plantation is relatively new in Bangladesh compared to other countries. The government has been encouraging plantation in the hilly areas since 1980. Some 45,000 acres of land have so far been allotted to the BFIDC and 32,500 acres to private owners.
The head of the association said domestic planters are feeling the pinches, due to the unavailability of bank loans for 15 years.
Local growers also urged the government to form 'Rubber Board,' which will provide policy support on lending, taxes, VAT and also monitor the local and international price of the item.
A rubber tree absorbs more carbon-di-oxide than other kinds of trees, Mr. Hossain said, adding the new VAT will also threaten the environment and discourage plantation, Mr Hossain said.
BFIDC data showed that the country's present annual rubber production is around 11,000 tonnes, half of which is produced by gardeners.
Source: http://thefinancialexpress-bd.com
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