Plastic tableware has experienced a steady increase in sales over the past few years, mainly due to its growing popularity among middle and low income families for relatively low and more sustainable prices than glassware.
But it is likely that this will change rapidly as the prices of these items increase for the withdrawal of the VAT exemption benefit.
The uniform VAT of 15 per cent will be slapped on plastic tableware and some kitchen utensils once the new VAT law comes into force on July 1st.
Industry operators are concerned that the taxation of VAT on these items will not affect prices, which is detrimental to the purchasing power of consumers, especially consumers. Low- and middle-income groups.
"People living in rural and suburban areas are our main consumers. As prices rise, demand for this part of the population will decline, which will lead to a slowdown in the sector's growth," said Ms Jashim Uddin , President of the Bangladesh Association of Manufacturers and Exporters of Plastic Products (BPGMEA).
The concern comes from the fact that the government will implement the VAT and the Supplementary Law 2012 from 1 July, eliminating the multiple VAT rates currently applicable for more than 100 goods and services.
Taxation of the flat rate VAT is feared to affect living costs and affect people, particularly those in low- and middle-income groups.
People will have to spend more to buy various items such as clothing and furniture, although the Minister of Finance has offered concessions to small and medium-sized enterprises and VAT exemptions to 1,044 items, instead of 536 articles in Under the 1991 VAT law.
Many products, which will obtain VAT exemptions, are not essential elements.
Some consumers say that if the prices of plastic tableware increase for taxation of a 15 percent VAT, many would go for imported products, instead of locally manufactured.
Up to now, manufacturers have to pay VAT on the import of raw materials for plastic tableware, but there is no indirect tax at the production level, according to the Insiders of the industry.
"The prices of these items will increase for the taxation of 15% VAT, even if we can claim a refund," said Choudhury Atiur Rasul, account manager of the Pran-RFL group, the main manufacturer Plastic items.
Giving an example, he stated that a 70-liter bucket is now sold for retail Tk 500. Manufacturers import raw materials worth Tk 350 and pay Tk 52.50 in VAT.
But once the new VAT system comes into force, its price will increase around Tk 23 and customers will have to pay Tk 75 in VAT.
Industry operators claim that the plastic industry has grown in recent years, supported by the increase in domestic use of plastic products for relatively high prices Low availability, and a wide range of models offered by local manufacturers.
The sector receives over Tk 3,000 crore of export of plastic products and records close to Tk 15,000 crore in the annual turnover of the domestic market and operators are expected to That the market is developing more.
Atiur said: "A few years ago, people were not interested in buying plastic dishes because many of those of substandard quality. But consumer confidence has increased over time due to improvements in quality by manufacturers and introduction of a wide variety of models. "
Jashim, also vice president of the plastic products manufacturer and exporter of the Bengal Industry Group, said the government should have exempted plastic dishes from VAT since it has Waived VAT on refrigerators and air conditioners manufactured within the new law