Dhaka, January 27, 2025:
Small and medium entrepreneurs have demanded restoration of VAT exemption on plastic and rubber flip-flops and footwear worth Tk 150 at the production stage.
According to them, the imposition of VAT will increase the price of these products, which will put pressure on low-income people and make it difficult for small and medium entrepreneurs in the industry to survive.
The entrepreneurs made this demand at a press conference at the Sagar-Runi Auditorium of Dhaka Reporters Unity (DRU) on January 25, 2025.
On January 9, 2025, the National Board of Revenue (NBR) increased the VAT on plastic and rubber flip-flops and footwear worth Tk 150 in the country to 15%. Ashraf Uddin, vice president of the Bangladesh Footwear Manufacturers Association, said at the conference that from May 27, 2024, the government had exempted VAT at the production stage of plastic and rubber slippers and footwear worth Tk 150 or less.
It was informed at the press conference that the imposition of 15% VAT in the new order has increased the production cost of the product. As a result, the price of slippers and footwear will increase, which will have a negative impact on the poor people from low-income families in villages to the urban poor. If the price increases, the demand for these products will decrease, which will have an adverse effect on the production of small and medium factories. As a result, many workers will lose their jobs.
In addition, the leaders claimed that the imposition of VAT could also create environmental problems. This industry mainly makes new products from old slippers and footwear through recycling. If production decreases, recycling will also decrease. As a result, unusable slippers and footwear will lie on the streets, increasing environmental pollution.
The vice-president of the association said that more than five hundred small and medium factories in the country are associated with this industry, which produces crores of pairs of products annually and ensures employment to thousands of people. If this industry is damaged, it will have a long-term negative impact on the country’s economy and environment.
At the press conference, the leaders strongly demanded the restoration of the previous benefits of VAT exemption. They also said that if the demands are not met, they will protest by holding various programs including human chains.
