DAILY STAR

Tuesday, May 12, 2009

UNFAIR TAX WEIGHS ON POWER SOLUTION PROVIDERS

Electronic product makers said yesterday a discriminatory tariff and duty structure hurts the development potential of the domestic electronics industry.“The import duty on finished electronic products is lower than the duty on raw materials,” Prof K Siddique-E-Rabbani, chief adviser of Bangladesh Power Solution Providers Association (BPSPA), told a press conference at the National Press Club.

The association conveyed the sector’s demands and concerns before the government frames the national budget next month for fiscal 2009-10

The BPSPA represents makers of various types of electronic products, such as offline UPS (up to a capacity of 2 KV), voltage stabilisers and protectors, IPS and solar battery charge controllers and solar inverters.

BPSPA said the incidence of tax on the import of components for these electronic items now stands between 28-38 percent, while the incidence of tax on the import of finished goods stands at 6-28 percent.

Local manufactures also have to pay 15 percent value added tax at the production stage.

“This unrealistic duty and tax structure has exposed local manufacturers to unfair competition with imported finished goods,” said Rabbani, also chairman of the Department of Biomedical and Technology, Dhaka University.

According to an estimate of BPSPA, local producers make about Tk 146 crore worth of products in the yearly total market of more than Tk 600 crore.

Imported products dominate the rest of the market, according to the association.

BPSPA urged the government to keep the import duty on raw materials 20 percent lower than the import duty on finished products. The association also demanded that the government set an easy 1.5 percent VAT at the production stage, based on retail prices, instead of the present 15 percent.

AKM Shamsul Huda, joint secretary of BPSPA, said only about 100 small-scale electronic good makers are in operation, out of 300, a decade ago.

“We promise to generate employment for about 2 lakh people and revenues of about Tk 10 crore in the next three years, if the government offers a favourable duty and tax regime,” said Shamsul Huda, also managing director of Grameen Bitek Ltd.