Metropolis Report-
A 10-year income tax break for business owners in plastic parks and underserved areas has been included in the finalized Plastic Industry Development Policy 2023. Nearly two years after a draft was made public in 2021, the policy was finally finalized in June of this year based on stakeholder input.
By 2028, the Ministry of Industries’ five-year plan will have been put into practice.
Nine strategies have been outlined in this plan, with a focus on growing local industries, developing capacity, expanding access to global markets, and developing skills for the sector’s sustainable development.
By granting loans to small and medium-sized businesses in the plastics sector at 3% interest from a designated fund, the program seeks to ensure adequate financial support for domestic companies.
Through the SME Foundation, this will be put into practice.
Additionally, the sector will receive tax credits on glass materials and supplies as well as duty exemptions on imported capital equipment, spare parts, or accessories. The strategy also specifies that any necessary tax breaks will be given for the industry’s fundamental infrastructure development projects. In addition, the government will offer the plastics industry facilities for bonded warehouses and VAT reductions when buying local products and services including energy, electricity, and telecommunications.
Samim Ahmed, president of Bangladesh Plastic Goods, praised the policy.
The Business Standard was informed by the Manufacturers and Exporters Association (BPGMEA) that “Incentives assured in the policy will help in the development of this industry.” The emphasis right now should be on carrying out the policies, he continued.
To unify all of the dispersed firms, Bangladesh Small and Cottage Industries Corporation is constructing a plastic industrial park in Munshiganj. An industrial park’s filling-in has been finished. The distribution of plots among the business owners will shortly lead to the start of the factory’s development.
The market for plastics in Bangladesh is currently worth roughly $2.99 billion. 83.4% of which are domestic, and the remaining 16.6% are foreign.
A 15% yearly growth goal has been set for the plastics industry under the new policy.
The market is also expected to grow to $10 billion, the industry’s GDP contribution is expected to rise by at least 2%, 10,000 skilled workers are expected to be trained, and five lakh new jobs are expected to be created by 2028. The initiative also seeks to make the market $20 billion by 2030 and achieve “zero waste nation” status.
While the average per capita use of plastic goods around the world is about 50kg, the country now consumes 5–7kg of plastic products per person.
According to BPGMEA President Samim Ahmed, the industry has experienced strong growth in recent years. “Market expansion targets can be attained given the required policy support,” he noted.
Bangladesh’s exports of plastic and plastic-related goods fell 4.21% short of the goal in FY23, but they climbed by 6.67% when compared to the prior fiscal year.
In comparison to the previous year’s $16.62 crore, exports of plastic items climbed by 26.23% in FY23 to $20.98 crore. Samim Ahmed claimed that exports of goods from the plastic industry had been steadily increasing despite the epidemic and the Russia-Ukraine war.
“This export is growing as a result of the need for plastic products on the international market. Future export potential in this industry will increase, the industry titan added.
Grand View Research estimates that the worldwide plastic market will reach $721.14 billion by 2025 from its current value of $609.01 billion in 2022.
Only 0.6% of the worldwide plastic market is occupied by Bangladesh. The US uses the most plastic per person (109 kg), followed by China (38 kg) and India (11 kg).
Despite the plastics industry’s immense potential, according to the Plastics Development Policy 2023, there is a lack of strategic direction and specific action to address the current limitations.
A lack of innovative technology, quality control testing facilities, proper treatment of plastic waste, business-friendly tax and customs facilities, etc. is another issue.
