The government should withdraw customs duties slapped on the imports of raw materials used in making sanitary napkins as the penetration of the basic hygiene product is low in Bangladesh due to higher prices, said a top executive.

"Sanitary napkin plays a key role in ensuring women's health. Still, the penetration is low. A high price is a major barrier to widening the usage of sanitary napkins," said Malik Mohammed Sayeed, chief operating officer of Square Toiletries.

In Bangladesh, millions of girls depend on old pieces of clothes during menstruation and thus suffer from cervical infection, urinary tract infection and other diseases.

"So, all customs duties on the raw materials of sanitary napkins should be withdrawn," Sayeed said while sharing his reactions about the tax measures for the next fiscal year.

There is a 25 per cent customs duty on air-laid and silicone-release paper and a 10 per cent duty on non-woven materials.

Sayeed said the government has taken a lot of decisions to promote local industries over the last couple of years. "Still, a lot of challenges prevail."

He appreciated the extension of the supplementary duty and value-added tax exemption granted to purchase raw materials needed to manufacture sanitary napkins and diapers.

"However, this time the proposed extension is only for a year. Considering the importance of female health and basic hygiene, we expect it to continue for a longer period."

The per capita spending of Bangladeshis for fast-moving consumer goods (FMCGs) is lower compared to India, Indonesia, China and many other countries. Consumption of essential personal care products is also low.

The consumption of FMCG products, especially toiletries items, is not increasing as the cost of goods sold are high and it is difficult to bring down their prices at the retail level, said Sayeed.

"So, some of the duty structures should be reviewed to reduce the manufacturing cost and raise per capita consumption without affecting spending. The government will also earn higher revenue."

Since manufacturers have lots of unused production capacity for body sprays, shaving foams, air fresheners, and aerosols, the senior executive called for removing the 20 per cent supplementary duty at the production level with a view to making the products affordable.

The supplementary duty on shaving foams and body sprays is 25 per cent at the import level. "This is creating an uneven field for Bangladeshi manufacturers. The supplementary duty on the finished goods in this category should be set at 45 per cent."

Sayeed describes the 25 per cent customs duty levied on major toiletries and cosmetics raw materials as a major barrier to competitive pricing and utilising higher production capacity.

He urged the government to cut the customs duties to 15 per cent for some raw materials, including the soap noodles used in making soaps.

Since RBD (refined, bleached and deodorised) coconut oil is a basic ingredient for personal care products and none in Bangladesh makes it, the supplementary duty imposed on the item should be reduced to 15 per cent from 30 per cent and the custom duty should go down to 10 per cent from 25 per cent, he said.

He said the government has imposed a 20 per cent supplementary duty to safeguard the local manufacturers of sodium chloride as some dishonest importers mis-declared sodium sulphate as sodium chloride.

"We request the customs authority to check and assess each consignment of sodium sulphate and withdraw the supplementary duty."

Sodium sulphate is the main ingredient for detergent powder.

The assessment value at customs points should be based on recent data, said the senior official of Square Toiletries, adding that a logical assessment will protect manufacturers from extra costs and a lower retail prices will benefit consumers.

Sayeed alleges that a significant portion of toiletries and cosmetics products sold in Bangladesh are entering the local market through grey channels. As a result, the government is losing revenues.

"If mis-declarations can be prevented and the import of these goods is assessed properly, local manufacturers will get a level-playing field and new jobs will be created. And the revenues of the government from these segments will receive a major boost."