Speakers at a discussion yesterday suggested tax reduction on imported raw materials used in the light engineering industry to strengthen the sector.
They also stressed the need for adequate infrastructure facility to develop the sector.
They were addressing a discussion on 'Problems and Prospects of Light Engineering Sectors' jointly organised by Dhaka Chamber of Commerce and Industry (DCCI) and SouthAsia Enterprise Development Facility (SEDF) at DCCI auditorium.
"When we import a UPS with a computer we don't need to pay any tax, but when we import it as a single product we have to count 7.5 percent tax," said K Siddique-e-Rabbani, founder director of Bangladesh Institute for Biomedical Engg and Appropriate Technology (BIBEAT).
On the other hand, he said, they have to pay 40 to 86 percent tax when they import raw materials for manufacturing UPS locally.
With the contradictory tariff policy, the local market, which needs 200 million pieces of UPS per year, goes to foreign countries, he went on.
"When we import a 500VA UPS we pay as high as Tk 100 in tax but when we manufacture it locally we have to pay around Tk 1000 on imported raw materials," Rabbani added.
Chairing the meeting, DCCI President Sayeeful Islam said lack of appropriate training, severe shortage of finance, lack of research and development facilities, low investment, no clear government policy and unavailability of raw materials are the main problems of the sector.
Referring to the SEDF survey on light engineering sector, the DCCI president said around 800,000 people are employed in 7,000 light engineering units that pay US$ 1,600 million annually as revenue.
Emphasising the need for technology transfer, the other speakers recommended acquiring technology instead of importing products to expedite the development of the sector.
They also urged the government and others concerned to come forward and work hard to solve the problems existing in the sector.
In fiscal year 2004-2005, export earning from engineering goods was US$85.02 million while the earning from electronic goods was $22.40 million, from bicycle $40.98 million and computer accessories $11.44 million.
SEDF Deputy General Manager Deepak Adhikary, DCCI Senior Vice-president Manzur-Ur Rahman, among others, spoke at the function.
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