Why RMG still benefitting tax reductions after 5 decades?

Business Report :

National Board of Revenue (NBR) Chairman Abdur Rahman Khan questioned why the ready-made garment (RMG) sector continues to enjoy a reduced tax rate even after 50 years, while most other sectors pay the standard tax rate.

“Why does the garment sector pay only 12 percent in taxes? After 50 years, why do you still need this benefit?” Khan asked these questions during a pre-budget meeting at the NBR headquarters in Agargaon, on Thursday.

Rahman also said that the government is working on to establish such a tax structure which will be logically discrimination free and thus will help to grow businesses.

“We’ve to get rid of the culture of tax exemption, it causes misuses and creates holes in the system,” He said that the present Value Added Tax (VAT) system of the country is not near the actual spirit of the VAT system.

Rahman mentioned that currently the VAT rates are 5 percent, 7.5 percent, 10 percent and 15 percent which is affecting the business community.

“The business people invited this loss for themselves, now they are feeling the pain,” he said.

He also said that if the business people agreed, then the NBR will reduce the VAT rate, but it should be a single digit rate.

The NBR chairman said that as the VAT imposes in various levels, the consumer who buys products can feel the pinch of the higher cost.

“That means, it (VAT) has connection with the prices of the products,” he added.

The general point-to-point inflation rate in Bangladesh declined further in February reaching 9.32 percent, down from 9.94 percent in January this year.

According to the latest data from the Bangladesh Bureau of Statistics (BBS), the decline in inflation was mainly driven by a fall in food prices.

In February, the point-to-point food inflation declined to 9.24 percent, down from 10.72 percent in January, the BBS data showed.