January 25, 2012


Bangladesh's poultry industry requires waiver of turnover tax


Amid spread of the avian influenza virus attack and higher import cost, Bangladesh's poultry industry has demanded waiver of "turnover tax" on their businesses, it said Saturday (Jan 21).


They said if the poultry feed millers need to pay the newly imposed tax on their total sales during the current volatility of the poultry business due to attack of bird flu virus on the farms, they will fail to survive.


The government has imposed 0.5% tax on the turnover of the poultry feed millers from the current fiscal (2011-12). The poultry enterprises are paying 5% advance income tax (AIT) on imported corn and 5% import duty on pelleted foods.


Md. Saiful Alam Khan, chief of a leading local poultry feed manufacturer Agro Industrial Trust (AIT), said though most of the poultry enterprises and farmers are facing losses due to outbreak of the bird flu, imposition of the turnover tax is a big blow to the struggling sub-sector.


"What a ridiculous policy of the government! If we face loss, we have to pay taxes on our total sales. How will we continue our business in this situation?" he asked.


Poultry owners claimed that hundreds of farms in the country had already been shut down in 2011 due to comeback of the bird flu virus after a deadly attack in 2007-08 calendar years.


"Since we need big investments to run poultry feed manufacturing units, our turnover is also high. So, we need to pay a large margin of our sales to the NBR," said Alam Khan, also the president of the Feed Industries Association Bangladesh (FIAB).


Moshiur Rahman, owner of Paragon Group, said, "the finance minister in his last budget speech pledged not to impose turnover tax, but the National Board of Revenue (NBR) has recently served us notice to pay the tax which is a burden on the struggling poultry sub-sector."


Moshiur Rahman, also the convener of Bangladesh Poultry Industry Coordination Committee (BPICC), said the government has extended the tax exemption on poultry industry up to 2013 when imposition of the turnover tax on the struggling industry is unjustified. He said: "Out of total production cost of the poultry birds and eggs nearly 75% is required to spend for feeds by the farms. So, if the tax is imposed on the local feed millers, the production cost of birds and eggs will rise further."


Fazle Rahim Khan Shahriar, managing director of Aftab Bahumukhi Farms Ltd, said, "poultry feed price in the domestic market has already increased due to recent price hike of feed ingredients in the international market. The turnover tax will hard hit the small and medium farmers who are nearly 85% of the total poultry businessmen."


Ihtehsham B. Shahjahan, general secretary of FIAB, said: "Prices of one-day chick, eggs and chicken largely depend on feed price. Therefore, if turnover tax on feed millers is not withdrawn, poultry products will be costlier."


Shahjahan said as the poultry farmers have suffered a lot in recent days due to comeback of Avian Influenza virus, the government's positive intervention in the sub-sector is highly necessary to save the industry. The poultry sector leaders urged the finance minister to take necessary steps to withdraw the turnover tax to facilitate smooth supply of chicken and eggs at competitive price in the domestic market.

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