BTMA seeks VAT reduction on local textile waste
Bangladesh Textile Mills Association (BTMA) has officially asked the National Board of Revenue to cut value-added tax (VAT) on both textile waste – or jhut – acquired for in-country recycling purposes, plus output VAT calculated as part of domestic recycled fibre sales.
Other suggestions included a proposal to outlaw exports of textile and apparel waste, to ensure supply meets demand.
BTMA president, Mohammad Ali Khokon, also offered up for review the idea of a new harmonised system code for recycled cotton fibre, as one way to navigate VAT complexities and other duties. At present, BTMA estimates, local recyclers pay around 7.5% VAT when sourcing discarded textiles from Bangladeshi businesses.
A further 15% VAT is subsequently applicable to any recycled cottons generated from this waste material when sold on to spinners. This, in Mr Khokon’s view, means “spinning mills are not encouraged to use the recycled fibre as they can import virgin cotton duty free”.
