Desk Report,
Demand to waive 15% VAT on low-priced sandals
Small shoe manufacturers have demanded the withdrawal of the existing 15 percent VAT on plastic and rubber flip-flops (sandals) and shoes priced up to Tk 150. They say that the VAT, which was introduced from the current fiscal year, is increasing the price of these inexpensive shoes for low-income people.
Demand to waive 15% VAT on low-priced sandals
Shoe manufacturers allege that the imposition of VAT on plastic flip-flops and sandals priced up to Tk 150 is causing small factories to close. The business is going into the hands of foreigners.
In this situation, the traders have demanded the restoration of VAT or VAT exemption at the production and supply stages of plastic and rubber flip-flops and plastic shoes priced up to Tk 150 per pair.
Demand to waive 15% VAT on low-priced sandals
Leaders of the Bangladesh Footwear Manufacturers Association made these demands at a press conference held at the Dhaka Reporters Unity (DRU) auditorium in the capital’s Segunbagicha on Tuesday. After the press conference, they also formed a human chain on the road in front of DRU.
The speakers at the press conference said that considering the expansion of local industries and the economic reality of consumers, the government has been providing value-added tax (VAT) exemption on shoes made of plastic and rubber since 2016. But in the middle of the 2024-25 fiscal year, the National Board of Revenue (NBR) issued an SRO on January 9 and withdrew the existing VAT exemption. In continuation of this, VAT has also been imposed in the proposed budget for the 2025-26 fiscal year.
Shoe traders said that the imposition of 15 percent VAT is increasing the import of foreign products (homogeneous slippers and shoes). On the one hand, this is wasting foreign currency, and on the other hand, this growing industry built by small investors in the country is under threat.
Association leaders said that the increase in VAT has increased the production cost of these low-priced products. As a result, production and sales have decreased. It has also had a negative impact on employment. The leaders said that the decrease in the production of plastic slippers in the country is also having a negative impact on the environment. These slippers are produced by melting old shoes and sandals. Considering the overall situation, traders have demanded that the VAT exemption facility be reinstated in this sector.
