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13th-Sep-2018

Fridge, AC and compressor manufacturers demand conducive policy supports

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Economic Reporter :
Local manufacturers of refrigerators, freezers, air conditioners and compressors urged the government for upholding the present industry-friendly policy supports in the next couple of fiscal years for the sustainable boom of hi-tech appliances manufacturing industry in Bangladesh.
They also demanded the withdrawal of 15 percent VAT on the locally made compressors and the elimination of imbalanced duties structure between the imported finished compressors and the raw materials of the locally made compressors.
It may be mentioned that the local fridge and air conditioner industry made a remarkable progress in the recent years. Earlier, the entire local market of fridges and ACs were fully import dependent.
But now, Bangladesh became self-sufficient in meeting the country's entire demands through its locally made fridges and ACs. Besides, Bangladesh is now exporting these appliances and spare parts. The local manufacturers targeted of bagging US$ 100 million from the export of fridges, air conditioners and spare parts in the year 2020.
The manufacturers of this sector said, they have been success in growing local electronics manufacturing industry for getting conducive duties and policy supports from the government.
Now, they think that more investment is required for the further boost of a sustainable and competitive manufacturing industry in Bangladesh. But, they are afraid of investing more due to the concern about whether the present policy supports to this sector will be continued or not in the coming fiscal years.
Mohammad Sahabuddin, general secretary of The Bangladesh Refrigerator Manufacturers and Exporters Association of Bangladesh, said, earlier the government announced VAT exemption benefit for the local refrigerator, freezer and air conditioner manufacturers till the current fiscal year 2018-19.
The local entrepreneurs are now showing their grave concern on the whether the present industry-friendly benefit will be continued or not in the coming fiscal years.
Thus, they demanded the continuation of the present VAT exemption for the next couple of fiscal years.
Sahabuddin also informed that the local compressors manufacturers have to pay 5 to 25 percent duties on the import of necessary raw materials whereas the finished compressors imports pay 5 percent duties.
In addition, the government imposed 15 percent VAT on the locally made compressors. Thus, the local compressors manufacturers urged the government for withdrawing the present VAT and imposing lower import duties for the necessary raw materials comparing to the duties of imported finished compressors.
Dr. Saleh Ahmed, former governor of Bangladesh Bank, said, the local entrepreneurs made a tremendous progress in the hi-tech appliances manufacturing industry of Bangladesh.
Now, customers are getting locally made quality fridges and air conditioners at affordable rates, he said adding that the fastest growth of the local appliances manufacturing industry also allures foreign investment in this sector.
To ensure the sustainable boost of this sort of industry in Bangladesh, he suggested the government continue the present industry-friendly policy supports.