Business Report :
The businesses of the country’s textile and apparel sector urged the government to postpone the proposed duty policy in the economic zones (EZ) investments for next five years.
Earlier, in the budget proposal for FY25, presented in parliament on June 6, Finance Minister Abul Hassan Mahmood Ali proposed a 1% import duty on all types of capital machinery for industries in economic zones and high-tech parks for the fiscal year 2024-25, which is zero currently.
He also stated that used construction materials brought in by developers for the development of economic zones will also be subject to a 1% duty.
Businesses also demanded to approve loans and permitting gas and power connections in the factories located outside of industrial zones until the EZs’s full preparedness.
They said that if the government does not change the policy, it will severely impact the investments, and as a result, employment generation will be hampered.
They made the remarks in a post-budget joint press conference on Wednesday, held at the BGMEA office in the capital.
Three apex trade bodies of the RMG and textile sector, the Bangladesh Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Textile Mills Association (BTMA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), jointly organized the press conference.
Replying to a question, BGMEA President SM Mannan Kochi said that they bought 46 plots in the EZ, but it will take at least three years to set up factories.
“Many entrepreneurs have already set up factories outside of industrial zones, and are awaiting utility connections. If the government will not provide utility connections, and banks do not approve loans for these factories, where will they go? Besides, it will be difficult for small entrepreneurs to set up factories in the EZs,” he added.
He also urged the creation of a fund for small and medium entrepreneurs with minimum interest rates for at least 15 years, saying that otherwise, small entrepreneurs would not grow considering the ongoing high interest rates and business establishment costs.
The finance minister said in the proposed budget that he will reduce cash incentives and other fasciitis to prepare for LDC graduation. The facilities will be stopped after graduation as per the WTO rules, and exporters will have to face open competition. Regarding the issue, BGMEA Vice President Abdullah Hil Rakib said that as per the WTO rules, the government would continue the cash incentives facility for six years after graduation.
“Otherwise, the government would provide incentives through alternative ways. We demanded from the finance ministry that either they continue existing facilities till 2032 as per the WTO clause 27 or provide alternatives before stopping the current policy. We again urged the government to do the same considering the country’s economy and employment,” he added.
Kochi said that India graduated in 2007 but the Indian government still provides policy support, incentives and other support to its textile and RMG sector in its various states.
“We are passing through a tougher situation than Covid-19 due to global geopolitical tensions and economic turmoil. Government can provide us with those supports if they will,” he added.