The Bangladesh Textile Mills Association demanded that the government provides more financial supports for primary textile manufacturers who meet the demand of fabrics in local markets and supply raw materials to the apparel exporters.
  
In the budget proposals placed to the National Board of Revenue, the BTMA, apex body of county’s spinners and weavers, sought easy funds for their projects, further cut in tax rates and reduction of duty on imported synthetic yarns and chemicals.
  
The association also sought total withdrawal of duty from imported machinery and installations for textile plants. The BTMA urged the government to fix seven per cent interest on bank loans to textile projects instead of up to 13 per cent now, as high interests rates discourage textile investors.
  
‘Primary textile industries should be taxed at 0.25 per cent—the rate that is imposed on export-oriented woven and knit apparel manufacturers,’ demanded the BTMA. At present primary textile units pay 15 per cent corporate tax.
  
The BTMA demanded 20 per cent cash subsidy for local spinners who have to import 98 per cent of cotton from abroad and become uncompetitive with the Chinese and the Indian.
  
At present local spinners supplying yarn for apparel exporters get five per cent cash incentive, which is scheduled to end by June 30 this year. The association demanded continuation of enhanced incentive up to 2010.
  
The association prescribed that the existing tax holiday to new textile needs to be extended up to 2010 if the government wants to allure investments in backward linkage industries to feed shortage of fabrics and yarns to apparel exporters.
  
The BTMA has also urged the government to continue giving cash subsidy to the sector till 2010 to help the industry to retain its external market amid stiff competition from some neighbouring countries.
  
The association demanded withdrawal of duty and taxes on importing spare parts, industrial air-conditioning equipment, fork lifts, prefabricates industrial buildings and chemicals the textile processors use.
 
The BTMA demanded withdrawal of 15 per cent value added tax and four per cent infrastructure development surcharge on imported synthetic yarns- viscos staple fibre that is used by local weavers.
  
The association urged the government to withdraw 7.5 per cent import duty on the Effluent Treatment Plant machinery which is required for developing environment-friendly textile processing industries prescribed by apparel buyers.
  
The association, however, demanded that the government increase duty on imported fabrics arguing that floods of cheaper fabrics imported through under-invoicing affect local industry.