The Bangladesh Cement Manufacturers Association (BCMA) on Wednesday submitted pre-budget proposals to the National Board of Revenue (NBR), urging the government to reduce production costs and improve the competitiveness of local manufacturers through key tax reforms.
The BCMA proposes reducing customs duties on cement clinker, a vital raw material, from 15 per cent to a flat Tk500 per metric ton. This change, it claims, would significantly lower production costs.
The association also seeks a reduction in advance income tax (AIT) on essential materials like cement clinker, slag, limestone, and gypsum. Currently taxed between 2 to 5 per cent, the BCMA calls for a uniform 0.50 per cent AIT rate across these materials, arguing that “it would allow manufacturers to reinvest savings into production.”
The BCMA has further requested a reduction in advance tax (AT) on imported raw materials from 2 per cent to 1 per cent. This change, it believes, would ease financial pressures on producers relying on foreign inputs, helping them maintain competitive cement prices.
The association also proposes removing the 10 per cent supplementary duty (SD) on limestone, a key material for cement production. The BCMA argues that “this duty unnecessarily inflates production costs,” and its removal would make cement more affordable, supporting growing demand in the construction sector.
Additionally, the BCMA urges the government to simplify the duty drawback process for exported cement by reinstating provisions from the 1991 VAT Act.
This, it says, would streamline the process, enabling manufacturers to more efficiently reclaim duties on exports and improving Bangladesh’s competitiveness in global markets.
The BCMA also calls for a uniform VAT system on a per-ton basis across the cement industry, which would reduce administrative complexity and ensure fair taxation.
Furthermore, the BCMA seeks a reduction in customs duties on cement machinery spare parts from 25 per cent to 1 per cent, which would lower maintenance costs and enhance production efficiency.
These proposed reforms aim to address high production costs and tax inefficiencies. They would help local producers remain competitive and meet growing demand from infrastructure and housing projects.
By lowering costs, the BCMA believes these changes will reduce cement prices, benefiting the construction sector and the broader economy.
The BCMA has urged the NBR to carefully consider these proposals, ensuring the cement sector’s sustainable growth.
BCMA President Mohammed Amirul Haque told TIMES of Bangladesh that the industry, counting on the infrastructure potentials, invested heavily in infrastructure and achieved nearly 100 million metric tonnes of annual installed capacity.
Of this, over 82 million metric tonnes remain as effective production capacity.
However, amid an economic slowdown, cement utilisation did not exceed 40 million metric tonnes in 2025, representing less than 50 per cent of effective capacity, far below the 60-65 per cent benchmark required for sustainability.
The rising interest rates, surging costs, and a slowdown triggered by global conflicts have further compounded the industry’s struggles.
“Tax rationalisation would help the industry absorb the ongoing shocks,” Haque added.
