BTMA urges removal of 2% advance income tax on cotton imports

BTMA Calls for Immediate Withdrawal of 2% AIT on Cotton Imports to Protect Local Mills

Leaders of the Bangladesh Textile Mills Association (BTMA) have urged the government to immediately withdraw the 2% Advance Income Tax (AIT) on cotton imports to protect the country’s spinning mills.

At an emergency press conference held at Gulshan Club in Dhaka, the BTMA also called on the caretaker government to align the corporate tax rate for textile mills with that of the readymade garment (RMG) sector until 2028.

Other key demands include scrapping the Tk 5 per kg specific tax imposed at the production stage on cotton yarn, synthetic fibres, and other fibres manufactured by local mills.

BTMA President Showkat Aziz Russell warned that the primary textile sector is struggling to stay competitive amid low gas pressure, high bank interest rates, and slashed export incentives. “We urge the government to reconsider these tax and VAT measures immediately,” he said. “Otherwise, the damage will be irreversible.”

BTMA Vice-President Abdullah Al Mamun cautioned that the new tax measures could cripple the industry, already grappling with soaring energy costs, rising labour expenses, and reduced export support. He warned that the effective corporate tax rate for textile mills could jump from 27.5% to nearly 59%, severely undermining competitiveness against regional rivals.

Speakers also highlighted that the new tax regime, in addition to increased VAT and shrinking export incentives, is compounding problems for mills already facing a severe gas and electricity crisis.

Among others, BKMEA Vice-President Amal Podder, BTTLMEA Chairman Hossain Mehmood, and Bangladesh Cotton Association Adviser Mohammad Ayub also spoke at the event.