Bangladesh is contemplating VAT exemptions for locally-produced recycled fiber, aiming to bolster the industry and reduce reliance on cotton imports. Explore the proposed changes and their potential impact.
Bangladesh considers exempting local recycled fiber and raw materials from VAT to support the industry and lessen reliance on cotton imports.
Traders currently pay 7.5% VAT on locally collected fibers and an additional 15% VAT at the point of sale, while no VAT is imposed on imported virgin cotton.
The Bangladesh Trade and Tariff Commission (BTTC) proposes a full VAT waiver for domestic producers at both the production and service stages.
The country's textile waste recycling capacity could significantly reduce virgin cotton import costs by $1.0 billion, given the estimated production capacity and domestic waste generation.
The EU's directive on using 30% recycled fibers in garments by 2025, along with taxation policies, and challenges faced by recycled fiber producers due to current VAT structures.
Read more about the insights into Bangladesh's VAT exemption considerations and their implications for the recycled fiber sector.
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