Frozen fish exporters seek 20pc cash incentive

Frozen fish exporters have urged the government to raise the cash incentives on their export receipts to 20 per cent from the existing 10 per cent for the next five years to enhance their competitiveness in the global market.

They also requested the government to continue with the current 0.25 per cent source tax in the upcoming fiscal year and reduce the proposed 10 per cent TDS (tax deducted at source) on the cash incentive to 3.0 per cent, the existing rate.

In a statement on Wednesday, President of the Bangladesh Frozen Food Exporters Association (BFFEA) Kazi Belayet Hossain termed the proposed budget for fiscal year 2019-20 'time-befitting'.

He, however, said the frozen fish exporters are disheartened by some of the budgetary measures.

Exports of frozen shrimp and fish fell drastically in the major markets in the last 10 years, as the local variety of shrimp failed to compete with the small-sized, low-rated vannamei in the international market, said Mr Hossain.

Moreover, local variety of 'Bagda', one of the major raw material in this sector, is selling at a rate of Tk 600 to Tk 700 per kg in the local market, which is much higher than the global market price, while one kg of vannamei is globally traded at Tk 350 per kg, he added.

As a result, local exporters are incurring huge losses, he said.

Export earnings from shrimp and frozen fish fell to $340.35 million and $60.58 million respectively during the July-May period of the current fiscal year.

The country fetched $477.83 million and $133.53 million from shrimp and frozen fish exports respectively in fiscal year of 2010-11, the BFFEA president said quoting official data.

"Though the government has taken a decision to launch two pilot projects for vannamei cultivation, the progress of the project implementation is very slow," he said, adding that it would take at least five more years to implement the pilot projects.

"The government should provide policy supports, including increasing the cash incentive to 20 per cent as given to other agro-products for the next five years until the commercial production of vannamei starts," he noted.

Mr Hossain also urged the government not to raise the TDS on cash incentive.

"Cash incentive is a part of product costs, including purchase of raw materials, which helps exports compete in the international market," he said, adding that the enhanced rate of TDS would hamper the export performance.

The BFFEA leader also demanded continuation of the current 0.25 per cent source tax for the sector in the next fiscal year.

He also urged the government to reduce the 35 per cent corporate tax to 10-12 per cent as in the garment sector.