Local recyclers collect waste from garment factories and textile mills to be used by spinning mills
Business News: The Ministry of Commerce has recommended the National Board of Revenue (NBR) withdraw the existing 22.5% value added tax (VAT) on clothing waste recycling business as the sector’s growth is being affected as a result of the tax.
It wrote to the NBR recently for taking measures in this regard to help RMG waste recyclers survive import competition.
Local recyclers collect waste from garment factories and textile mills to be used by spinning mills.
Currently, they have to pay 7.5% VAT at the collection stage and 15% at the supply stage of their products.
The Commerce Ministry put forward the request to the NBR following a meeting with the stakeholders in the recycling sector, including Bangladesh Textile Mills Association (BTMA), held at the ministry in January.
At the meeting it was said, the growth of the sector is being affected due to the VAT-induced production cost hike of recycled yarn.
As a result, the local recycling mills cannot compete with the imported yarn.
At the meeting, the BTMA explained that the raw materials used by the recycling mills are waste collected from the local textile and garment industries and are recycled into yarn and fabric and then converted again as garments items for exports.
