Steelmakers seek tax favours in next budget

| Updated: April 26, 2019 15:03:20

Picture used for illustrative purpose only — Collected Picture used for illustrative purpose only — Collected

The country's steel manufacturers on Wednesday urged the government not to increase the gas price, saying that the proposed hike would make steel products costlier.

They also called for restricting the import of steel rod to help protect the domestic industry.

They also requested the government to continue with the existing tariff rates from production to distribution levels, and the current rate or zero per cent Value Added Tax (VAT) on import of raw materials.

The steelmakers also called for revoking the advance income tax (AIT) and tax deduction at source (TDS) in the budget for next fiscal year (2019-2020), as the rates are unusually high.

They came up with the demands at a press conference at the National Press Club, jointly organised by the Bangladesh Steel Manufacturers Association (BSMA), Bangladesh Re-rolling Mills Association (BRRMA) and Bangladesh Steel Mill Owners Association (BSMOA).

BSMA chairman Manwar Hossain, secretary general Md Shahidullah, vice chairman Zahirul Hoque Chowdhury, BRMA secretary general Mahbubur Rashid, and BSMOA chairman SK. Fazlur Rahman attended the press conference, among others.

Md Shahidullah said that despite several challenges, Bangladesh's steel manufacturing sector has grown remarkably in the last one decade thanks to the infrastructure development activities across the country.

"Annual steel consumption in the country is now around 5.5 million tonnes, which was only 1.6 million tonnes in 2008," he said.

On behalf of the associations, Mr Shahidullah read out a written statement, saying that the recent proposal to raise the gas price will seriously jeopardise the manufacturers as the energy plays a vital role for the sector.

"Retail steel price largely depend on the manufacturing cost," he said, adding: "Of the total cost of steel production, 15 per cent is meant for the energy."

The distribution companies have recently proposed to raise the gas price by 132 per cent to Tk 18.88 per cubic meter from Tk 7.76 for steel industries, he said.

The companies have 96 per cent hike in price of gas used by captive power units, he added.

Airing concern over the proposal, the BSMA secretary general said: "The proposed rates are very high and unusual, which, if put into effect, might lead to increase the production cost up to Tk 4,000 per tonne on an average."

BSMA president Manwar Hossain said during the last 10 years the steel price did increase that much though were fluctuations.

"The price of rod increased to Tk 75,000 per tonne in 2008, whereas the best quality rod at present sells at Tk 63,000 per tonne," he said.

The BSMA president also said there is a need for sustaining existing VAT based on the tariff rates. If the tariff is revoked and new VAT rate is imposed, the price of steel rod will increase by Tk 9,000 per tonne putting pressure on the buyers, he said.

There are around 350 steel manufacturing businesses of various sizes, which employ more than 0.25 million individuals directly.

According to sources, some globally renowned steel manufacturers from countries like India, China and Japan are preparing to start manufacturing in Bangladesh, which might threaten the sustainability of the local industry.

Responding to a query, BSMA director Sumon Chowdhury said the country is now self-reliant in manufacturing long steel products like rod and angles.

"We would request the government to welcome foreign companies in manufacturing flat products and steel sheets as those are still being imported," he said.

[email protected]


Share if you like

Filter By Topic