Dhaka, April 20 -- The government is considering exempting locally produced recycled fibre and its raw materials from Value-Added Tax (VAT) in a move to protect the industry and eventually reduce dependence on cotton imports, according to sources.

To this end, the Bangladesh Trade and Tariff Commission (BTTC) recently proposed a full VAT waiver for both production and service stages for domestic producers, they added.

Under the existing VAT structure, traders pay 7.5 per cent VAT on the purchase of locally collected clips or fibres, and an additional 15 per cent VAT at the point of sale.

In contrast, there is no VAT on imported virgin cotton under the bond facility.

Currently, there are 23 companies involved in the textile waste recyc...