THE suggestions from representatives of the Real Estate and Housing Association of Bangladesh (Rehab) sometime ago merit an immediate and positive consideration and acting upon by the government. These mainly relate to withdrawal temporarily of existing duties and value added taxes (VAT) on all kinds of finished iron products and their raw materials. Such duty and tax exemptions, as underlined by Rehab, would lead to a substantial fall in the prices of construction materials and hence a major slashing down of constructions costs. This, in turn, would breathe a new lease of life to this sector which has been suffering from the soaring prices of construction materials particularly iron products. The Rehab is also asking for controls on the rising prices of cement, electrical materials, etc., which are also regarded as basic to construction activities. Perhaps, the government can give due consideration to these requests when it announces the national budget -- two months from now -- by scaling down duties on these items.
The concessions requested by Rehab are sensible because this body is not demanding a permanent waiver of duties and taxes or closer regulatory actions in respect of the sale of construction materials. It is asking for a temporary reprieve from very abnormal price escalation of construction materials which is impacting severely on its activities. The government will, of course, weigh the loss in terms of revenues from withdrawing duties and taxes. But such reduction in revenues, when contrasted with the likely bigger loss to result from a major slowdown in the construction sector, would indicate the rationality of accepting the proposal for duty and tax reductions in the greater interest of the economy. Favourably acting upon Rehab's proposals will benefit not only housing and real estate activities. The same should benefit the entire construction sector and the good effects of the same would also have spread-effects on the economy.
There are many factors associated to a buoyant construction sector. A booming construction sector creates and sustains the demand for a wide range of commodities ranging from sanitarywares to paints and some services as well. A stagnating construction sector pulls down also growth or production of these goods and services. Besides, the direct negative effect of unemployment created due to job losses from dwindling construction activities, is also a cause for concern.
Considering all of these factors, the government would be acting prudently if it takes prompt action in relation to the suggestions put forward by Rehab.