Bird flu and tax big blow to Bangladeshi poultry industry

The Bangladeshi poultry industry has demanded waiver of “turnover tax” on their businesses amid spread of the Avian influenza virus attack and higher import cost because of US dollar appreciation, industry people said.

They said if the poultry feed millers need to pay the newly imposed tax on their total sales during the current volatility of the poultry business due to attack of bird flu virus on the farms, they will fail to survive.

The government has imposed 0.5% tax on the turnover of the poultry feed millers from the current fiscal (2011-12). The poultry enterprises are paying 5% advance income tax (AIT) on imported maize and 5% import duty on pelleted feeds.

Tax blow

Md. Saiful Alam Khan, chief of a leading local poultry feed manufacturer Agro Industrial Trust (AIT), said though most of the poultry enterprises and farmers are facing losses due to outbreak of the bird flu, imposition of the turnover tax is a big blow to the struggling sub-sector.

“What a ridiculous policy of the government! If we face loss, we have to pay taxes on our total sales. How will we continue our business in this situation?” he asked.

Poultry owners claimed that hundreds of farms in the country had already been shut down in 2011 due to comeback of the bird flu virus after a deadly attack in 2007 and 2008 calendar years.

“Since we need big investments to run poultry feed manufacturing units, our turnover is also high. So, we need to pay a large margin of our sales to the state,” said Alam Khan, also the president of the Feed Industries Association Bangladesh (FIAB).

Moshiur Rahman, owner of Paragon Group, said, “the finance minister in his last budget speech pledged not to impose turnover tax, but the National Board of Revenue (NBR) has recently served us notice to pay the tax which is a burden on the struggling poultry sub-sector.”

Moshiur Rahman, also the convener of Bangladesh Poultry Industry Coordination Committee (BPICC), said the government has extended the tax exemption on poultry industry up to 2013 when imposition of the turnover tax on the struggling industry is unjustified.

Poultry sector leaders urged the finance minister to take necessary steps to withdraw the turnover tax to facilitate smooth supply of chicken and eggs at competitive price in the domestic market.