Bangladesh Small Footwear Makers Urge VAT Reversal to Save Low‑Cost Industry

Small-scale makers of rubber and plastic footwear in Bangladesh have appealed to the interim government to reinstate a 15% VAT exemption for shoes priced at or below Tk 150. The removal of this tax relief mid‑fiscal year has sharply increased production costs, suppressed demand, led to factory closures, and caused significant job losses—particularly among informal workers.

The VAT exemption, in place since 2016, was withdrawn via a statutory order by the National Board of Revenue in January 2025. The new fiscal year’s budget retains the tax, prolonging pressure on manufacturers.

Mohammad Fazlu, president of the Bangladesh Footwear Manufacturers’ Association, noted the sector’s dependence on low-income buyers—hawkers, rickshaw-pullers and day labourers—who are most affected by the price hikes. The group also warned that cheap imports from India are increasingly dominating the market.

The association emphasized the environmental value of the industry, which recycles rubber, plastic and polythene. They urged the government to reverse the VAT decision to preserve local jobs, curb inflationary import reliance, and maintain rural livelihoods