Bangladesh Textile Mills Association (BTMA) Vice President Abdullah Al Mamun said, “The price of gas has increased abnormally, yet there is inadequate supply. Export incentives have dropped steadily to just 1%, which was once 25%. Banks are also short of funds. With the new 2% advance income tax (AIT) on cotton imports, this industry will no longer survive.”
“Around 90% of textile mill owners are running at a loss; they want to sell their factories and exit the industry,” he added. “We are dying.”
Adverse policies, initiated during the previous government’s tenure and continued by the interim government, have gradually pushed the country’s textile entrepreneurs into crisis, industry leaders said, claiming that nearly 90% of textile mill owners are seeking ways to exit the industry.
The organisation demanded an immediate reduction in the new AIT, VAT, and corporate tax.
Confirming this, BTMA Director Khorshed Alam told TBS the number is likely to be over 50. “I want to sell one of my two spinning mills located in Narayanganj.
After that, I also intend to sell the other.”
The BTMA comprises around 1,800 textile mills, over 500 of which are spinning mills.
Explaining, Khorshed Alam said, “Costs were already high. With the new taxes, we now have to sell yarn at prices below production costs. It won’t be possible to survive in the long run.”
“Currently, yarn is being sold at a loss of Tk4 per kg,” the BTMA director added.
In the FY26 budget, the government raised the corporate tax for the textile sector from 15% to 27.
5%, imposed a 2% AIT on cotton import prices, and increased the VAT on yarn sales to local weaving mills (not for export) from Tk3 per kg to Tk5 per kg.
The new VAT took effect on the day the budget was announced, while the new taxes came into force on 1 July, the beginning of the new fiscal year.
Due to the sudden large tax amounts, cotton importers have temporarily stopped clearing cotton consignments from the ports.
At the press conference, BTMA Vice President Abdullah Al Mamun said, “If the government does not reverse this tax hike decision, it will backfire, and the revenue target from this sector will not be met.”
The AIT, which applies to imports of raw materials like cotton and man-made fibres, is technically adjustable according to the revenue authorities.
Badsha Mia, managing director of Badsha Group of Industries and a leading textile entrepreneur in the country, said, “We don’t have a level playing field with neighbouring countries. In India, entrepreneurs are given incentives of about Tk20 per kg. So they can offer yarn for export at a discount of up to Tk16 per kg.”
“Our interest rates have doubled, gas prices have tripled, the dollar has jumped from Tk80 to Tk122, and now there’s additional tax pressure,” he added.
“Many factories are on the verge of shutting down. The government should look into it,” Badsha Mia said, describing the current situation as a pre-planned effort to cripple the country’s industry.
Razeeb Haider, managing director of Outpace Spinning Mills Ltd, added, “The newly imposed 2% AIT is the final nail in the coffin for our textile sector.”
Several trade associations — including the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association — also expressed their support for BTMA’s demands at the press conference.
