Vested quarter out to destroy cement sector | 2019-06-24

Vested quarter out to destroy cement sector

Country’s strides towards SDG implementation in jeopardy

Firoz Al Mamun

24th June, 2019 12:40:01 printer

Vested quarter out to destroy cement sector

A group of vested interests are engaged in a deep-rooted conspiracy to block the country’s socioeconomic development and SDG implementation by destroying the cement sector, a crucial material used for construction of all physical infrastructures.

Besides, the under-construction Padma Bridge, metro-rail, elevated expressway, Rooppur nuclear power plant are expected to take the country’s socioeconomic development to a new height.

But some vested interests are trying to nip the country’s development strides in the bud by making the cement production and supply costlier.

According to experts, the harmful effect on the cement sector will not only hamper development projects but also the GDP growth of the country. 

As a result, employment, per capita income and social safety will be affected.

The proposed budget set a target to hike Tax-GDP ratio to 15 percent by 2021, but it will be unlikely if development projects suffer a setback.

The conspiracy is evident in the provision of the proposed new budget that suggests imposition of 5 percent advance tax (AT) on the import of raw materials for cement and 3 percent source tax on distribution.

Cement manufacturers are currently paying 15 percent VAT on the import of raw materials. They have now to bear the brunt of more 8 percent tax (5 percent AT plus 3 percent source tax).

Bangladesh Cement Manufacturers Association (BCMA) has submitted a letter to Finance Minister AHM Mustafa Kamal with an appeal to reconsider the hike.

Signed by the association president, Md Alamgir Kabir, the letter said the new hike in VAT and source tax will push them to resort to bank loan and count interest ultimately hiking the cement production cost.

Locally produced cement is being used in the construction of roads, bridges, flyovers, power plants, buildings and other physical infrastructures across the country, but its production depends entirely on raw materials.

The local cement sector is already facing tough situation due to increase in the price of raw materials in the international market.

Cement entrepreneurs have to make 32 percent profit to offset the extra cost, the letter said.

Any hike in cement production cost due to imposition of additional VAT will result in the hike of cement price and project implementation costs, added the letter.

The supersonic pace of Bangladesh’s economic development under the Awami League government led by Prime Minister Sheikh Hasina has already got global acclamation.

Various local and international agents are working behind the scene to thwart the nation’s rapid forward march and various development goals.

Some officials within the government allegedly conspired to include such provisions in the proposed national budget. 

Cement manufacturers, realtors and construction experts are of the view that the conspirators have targeted such a key component, which is the mother of all development projects.

The country sees tremendous development in communications sector following construction of roads, bridges, flyovers, foot over bridges in the capital and across the country.

BCMA has called upon the government to pass the budget dropping the proposal to impose 5 percent advance tax on the import of raw materials for cement and 3 percent source tax on its distribution.

Real Estate and Housing Association of Bangladesh (REHAB) President Alamgir Shamsul Alamin thinks that 5 percent advance tax and 3 percent source tax on distribution will increase per sack of cement by around Tk40.

“The hike in cement price would directly affect the entire construction sector while the cost of apartment would go high,” said the REHAB president.

Praising the policy support in the budget for real estate sector, Alamgir Shamsul Alamin urged the government to withdraw advance tax on all kinds of raw materials including cement to facilitate the smooth growth of the industry.


Top