Plastic industry seeks VAT relief

1Plastic goods manufacturers yesterday urged the government to reduce the value-added tax (VAT) on plastic tableware and household items from the proposed 15 percent to 5 percent, warning that it would otherwise severely impact low- and middle-income consumers.

"The proposed hike in VAT will disproportionately burden ordinary citizens, especially those at the grassroots level," said Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association, at a press conference at its headquarters in the capital.

The association said nearly 20 percent of establishments in the plastics sector have been facing difficulties over the last two years.

A combination of economic pressures, including rising fuel prices and high interest rates, has affected the plastic goods manufacturers, said Ahmed.

"We call on the government to retain the existing 5 percent VAT rate to ease the pressure on consumers," he added.

The toy industry has been growing, but the import of raw materials is subject to tariffs of more than 87 percent, he said, urging the government to bring it down.

He said the plastics sector has made substantial contributions to exports and employment in recent years and deserves policy support to ensure its continued growth.

"Without it, the industry will struggle to survive," he said.

The association said it has consistently advocated for measures such as duty reductions on raw materials, tax relief for recycled products, and incentives for capital equipment to encourage modernisation and competitiveness in global markets.