Leather and footwear exporters have urged the government to withdraw duties on footwear machinery import and reduce import duty on footwear components.

In a proposal for 2004-2005 budget, Bangladesh Finished Leather, Leathergoods & Footwear Exporters' Association (BFLLFEA) demanded complete withdrawal of duties on machinery import to minimise production cost of footwear.

The exporters also requested the government to re-fix the import duty on footwear components at 2.5 percent instead of existing 25 percent to help make the firms competitive.

The association also demanded complete exemption of Vat on

footwear exports.

In the proposal, submitted to the National Board of Revenue, the association also urged the government to exempt 2.5 percent development surcharge on import of raw materials, such as chemical, for the export-oriented leather industry.

The exporters also sought 15 percent cash incentives on crust and finished leather export.

The BFLLFEA proposal also urged the government to keep the profit from export earnings free from income tax. Exporters in India can reduce their production cost as their export earning is free from income tax, the association cited the example.

Bangladesh's leather sector earned Tk 1377.72 crore in the FY 2002-03.