The country’s cuisine sector businessmen urged the Bangladesh Bank (BB) to waive interest on bank loans availed by the businesses until this December to help them offset their losses and survive during the ongoing Covid-19 pandemic.
Bangladesh Foodstuff Importers and Suppliers Association (BAFISA) has recently written a letter to the central bank for considering the issue and forwarded it to the Prime Minister's Office, finance and commerce ministries, National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
The association has also asked the central bank not to classify existing loans from these traders until December 2021.
The sector had been facing several problems including regular payment of value added tax (VAT) and tax as well as different restrictions due to the spread of coronavirus, industry insiders said.
The pandemic severely disrupted the sector in terms of cash flow and the financial capacity of both importers and suppliers have been dipping since February last year, said Golam Nabi, president of BAFISA.
Initially, many assumed that the pandemic would become ineffective within six months. But it has been almost one and half years now with no signs of the world getting rid of Covid-19 soon, he added.
Besides, the cash flow and the financial capacity of the importers and suppliers declined, he also mentioned.
According to BAFISA, the sector faces diverse problems, including periodic payment of value-added tax (VAT) and other taxes, along with different restraints induced by the pandemic.
"Food importers have to pay the highest import duties compared to other sectors, having a total-tax-incidence (TTI) ranging from a minimum of 150%-200% on various products. At the same time, we are subjected to corporate tax at the rate of 37%," said the president.
Additionally, revenue targets set by the NBR and the current incentives provided to officers at the field level have added pressure on the businesses of the sector, the BAFISA president informed.
As a result, it was very difficult for them to continue paying loan instalments including interest. Altogether, the sector was going through tough times since February 2020, they added. They have sought waiver of interest on the loans which were regular in payment until January, 2020.
In this regards, chief spokesperson of Bangladesh Bank (BB) Serajul Islam said, the proposal is now under review.
Talking to the Bangladesh Post, DCCI President Rizwan Rahman said that the focus should be on widening the tax net and collecting officers should be incentivised on that, not on revenue collection that induces harassment to the businesses facing disruptions because of the pandemic.
DCCI President also said that the increasing revenue target each year is churned from a fixed number of taxpayers.
He suggested the NBR to remove the discretion of field-level VAT officials among the ranks of deputy commissioners or deputy directors and the automation of income tax and VAT departments.
Some 115 traders and importers registered with BAFISA. It was founded in 2019 to promote import opportunities and co-operation between importers and suppliers in the country.
