Industry Desk: The jute department is going to increase the revenue fee by 400% for exports of jute and jute products, the lone $1 billion forex earner alongside the biggest contributor apparel sector.
In this way, the department will earn an additional Tk12-17 crore. Banks will deduct the fee at source at the time of exports.
The current revenue fee stands at Tk2 per bale of raw jute exports, while the rate is Tk0.1 against the export of Tk100 worth of jute products. The rate was fixed by the Bangladesh Bank in July 1995 as per a proposal from the textiles and jute ministry.
The jute department charges the amount as an inspection fee beyond the 0.35% source tax levied by the National Board of Revenue on exports of jute and jute goods.
Banks deduct the fee while handing over export documents and submit it to the jute department as a non-tax revenue, according to a central bank circular.
On 28 April, the textiles and jute ministry sent a letter to the Financial Institutions Division, requesting it to issue a circular through the Bangladesh Bank as per the jute department’s proposal.
A meeting to be held on 5 September with ABM Ruhul Azad, additional secretary to the Financial Institutions Division, in the chair may reach a final decision over hiking the revenue fee for exports of jute and jute goods. Later, the Bangladesh Bank will issue a circular fixing the new fee as per the decision made in the meeting.
When exports of all major products, including readymade garments, plummeted during pandemic-triggered lockdowns across the globe last year, jute showed a lot of promise, putting up an excellent performance. But in the first month of the current fiscal year, the jute sector started registering a big slump.
Exporters think an increase in the revenue fee collected as an inspection fee during this time will have a serious negative impact on jute and jute exports.
Mohammad Shafiqul Islam, chairman of Bangladesh Jute Goods Exporters Association and also managing director of Dubai Jute and Bag Corporation, told that demand for jute and jute products in the international market have dropped drastically under pandemic impacts, so have their prices. As a result, last July, exports fell by half year-on-year. In this situation, it is unthinkable that the government will charge additional revenue from exporters. If the jute department decides to charge 400% revenue fee in the name of the inspection fee, it will severely hamper exports, he added.
On 1 April this year, the then director general of the jute department Hossain Ali Khondakar wrote a letter to the textiles and jute ministry, proposing increasing the revenue fee for raw jute exports from Tk2 to Tk10 per bale and for jute product exports 0.50% instead of 0.10%.
The department collects revenue amounting to Tk3 to Tk3.5 crore a year at the existing rate. If the revenue is available at the proposed rate, it will increase to Tk15-20 crore.
In the letter, the jute department mentioned the government’s 8%-20% cash incentives for exports of jute and jute products as a logic to increase the revenue fee.
When contacted, Director General (Additional Charge) of the jute department Enayet Ullah Khan told, “We have not reached a final decision yet.”
He declined to comment on the reason for the collection of revenue in the name of “inspection fee” in the case of jute and jute product exports.
According to the Export Promotion Bureau (EPB), exports of jute and jute products raked in $1.16 billion in FY21. The commerce ministry set a target to fetch $1.42 billion in export earnings from the sector in the current fiscal year. The sector export earnings in July this fiscal year amounted to $60.77 million, which was 41% less than in the same month a year ago and 50% short of the monthly target.
According to the Bangladesh Bank, the government has offered 20% cash incentive for export of diversified jute products, 12% for exports of jute hessian, sacking and carpet backing cloth and 6% for exports of jute yarn and twine.
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