DHAKA, July 5, 2025 (BSS) - Leaders of Bangladesh Textile Mills Association (BTMA) today demanded the government for immediate withdrawal of two percent of Advance Income Tax (AIT) on cotton import to safeguard the local spinning mills.

They also urged the interim government to reset the corporate tax like the RMG sector until 2028.

Their other demands include exemption of specific tax of Taka five per kg at the production stage on cotton yarn, synthetic fibres and other fibres produced by domestic textile mills.

The BTMA leaders made the demands at an emergency press conference held at Gulshan Club in the city.

They said the primary textile sector is finding it difficult to remain competitive due to low gas pressure, high bank interest rates, and a reduction in cash incentives on exports.

BTMA President Showkat Aziz Russel, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice-President Amal Podder, Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) Chairman Hossain Mehmood, Bangladesh Cotton Association Adviser Mohammad Ayub spoke at the press conference, among others.

BTMA President Showkat Aziz Russell urged the government to immediately reconsider and reverse the tax and VAT decisions. “If not, the consequences will be irreversible,” he said.

BTMA Vice-President Abdullah Al Mamun said the new tax would have a crippling effect on the industry already burdened with high energy costs, labour expenses, and declining export incentives.

He cited that the effective corporate tax rate for textile mills could rise from 27.5% to nearly 59% as a result of the new tax structure, rendering the industry less competitive compared to its regional peers.

Additionally, the new tax, coupled with additional VAT burdens and reduced export incentives, comes at a time when mills are facing gas and electricity crisis.