BTMA urges removal of VAT to boost textile recycling

The Bangladesh Textile Mills Association (BTMA) recently asked the National Board of Revenue (NBR) to remove the value-added tax (VAT) on buying textile waste for recycling and on selling recycled fibers.

The organization wants to encourage the recycling industry to develop more in the country.

BTMA’s President Mohammad Ali Khokon wrote a letter on August 6th to the Chairman of NBR, Abu Hena Md Rahmatul Muneem. He also suggested making a new code for recycled cotton fibers.

They want to create a new code to avoid problems with VAT and extra fees on recycled fiber products.

Right now, recycling businesses have to pay 7.5% VAT when they buy textile waste, known as ‘jhut,’ from sellers. And when they sell recycled fibers to spinning and yarn mills, they have to pay 15% VAT.

BTMA also said that they shouldn’t be allowed to send garment and textile waste out of the country. They said this because there are more recycling businesses growing in Bangladesh.

According to BTMA, the clothing industry in Bangladesh makes about 400,000 tonnes of waste each year. But only 5% of this is recycled in the country. They think if they could recycle all of it, they could cut down on importing new cotton by 30%. This could save around US $1 billion every year.

The President of BTMA said that if they want recycling to grow, they should remove the VAT on recycled fibers. Otherwise, spinning mills might not want to use recycled fibers because they can bring in new cotton without paying taxes.