The Bangladesh Steel Manufacturers Association (BSMA) has urged the government to reduce income tax, customs duties and VAT imposed on the steel sector in the national budget for FY2026-27, to help sustain the country’s steel industry.
The association also argues that these taxes introduced in the previous budget are putting pressure on the country’s steel industry while placing its proposals at a pre-budget discussion held today (27 April) at the National Board of Revenue (NBR) in Dhaka.
Association president Mohammad Jahangir Alam said the country’s steel (rod) industry has been adversely affected in various ways over the past few years due to the depreciation of the taka against the US dollar, dollar shortages, rising operational costs, global instability, higher interest rates, and increased taxes, duties and VAT at different stages in FY2025-26, pushing the industry into a deep crisis.
The association proposed reducing advance income tax on raw material imports to Tk500 from Tk600, lowering tax deducted at source (TDS) on rod sales to 1% from 2%, cutting turnover tax to 0.5% from 1%, and allowing adjustments of advance income tax.
Jahangir Alam also cited political instability, the lingering effects of the Covid-19 pandemic, the Russia–Ukraine war, higher gas and electricity prices, rising bank interest rates, and a slowdown in infrastructure development as key factors negatively affecting the sector.
On customs duties, the association noted that although previous duties were withdrawn, a new VAT of Tk1,800 per metric tonne has been imposed on imported raw materials—something that did not exist before.
The organisation called on the government to rationalise income tax, customs duties, and VAT in the FY2026–27 budget to support the steel sector.
Md Abdur Rahman Khan, chairman of the NBR, said it would not be possible to accommodate all demands from businesses in the upcoming budget due to fiscal constraints and revenue pressures. However, he added that reasonable proposals would be considered.
He also said the government would work to resolve complexities related to HS codes, while urging businesses to prevent misuse. Steps would also be taken to align import values with international prices.
Representatives from several trade bodies also attended the meeting, including the Bangladesh Re-Rolling Mills Association (BRRMA), Bangladesh Iron and Steel Importers Association (BISIA), Bangladesh Chemical Importers and Merchants Association (BCIMA), Bangladesh Paint Manufacturers Association (BPMA), Bangladesh Cosmetics and Toiletries Importers and Merchants Association (BCTIMA), Lubricants Importer Association of Bangladesh (LIAB), Bangladesh Marine Fisheries Association (BMFA), Bangladesh Aqua Product Companies Association (BAPCA), Bangladesh Motor Parts and Tube Merchants Association (BMPTTMA), and the Electronics Safety and Security Association of Bangladesh (ESSAB).
About The Author
