Bangladesh urged to exempt rubber, plastic footwear from 15% VAT

VAT exemption on this category of footwear had been in place since 2016.

The small-scale footwear industry is at risk of collapse due to the present tax policy, the association cautioned.

The VAT exemption removal has led to a rise in production costs, reduced demand, factory closures and significant job losses, particularly affecting informal workers in both rural and urban areas, the association's leaders told a press conference.

The primary raw materials used in this sector are discarded rubber, plastic and polythene, and its main customers are from low-income segment, and therefore, the VAT burden is directly affecting them, said association president Mohammad Fazlu.

They also highlighted that cheap imports, especially from India, are increasingly capturing the domestic market as locally-made products become more expensive, according to domestic media reports.

The VAT exemption was withdrawn through a statutory regulatory order issued by the National Board of Revenue in the middle of the last fiscal. The proposed budget for the next fiscal maintains this VAT.

ALCHEMPro News Desk (DS)