BGMEA demands to keep 0.5pc source tax for next 5 yeaars

Staff Reporter :
The entrepreneurs of apparel industry on Monday demanded continuation of existing source tax rate for next five years and legal protection from uncontrolled incidents.
The BGMEA, apex body of the apparel entrepreneurs, also supports the government’s move to grant amnesty to bring back laundered money. It, however, said, the initiative is needed to face unwanted situation.
It said the government can earn more revenues by helping the exporters get competitive without increasing the rate of source tax on exports.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) passed the remarks in its formal budget reactions given at a press conference in a city hotel.
Demanding the tax facility, the BGMEA President Faruque Hassan explained that the government received Tk 1,320 crore as source tax against $31.45 billion in exports, which is estimated to be Tk 1,783 crore at the end of the outgoing fiscal year to be ended on June 30.
If Bangladesh can export $45 billion worth of garments in the next fiscal year, tax income from source tax would be Tk 2,070 crore, he added.
“If we can increase exports the government will be able to earn more as taxes without raising the tax rate,” he said.
Of the other demand, BGMEA made to the government was to give 10 incentives on export of non-cotton items.
“Many buyers go bankrupt due to different contexts or crises at different times and go out of business or become unable to pay export value and we have faced such several incidents during the pandemic,” he said.
The BGMEA president said many factories had been forced to take loans to pay dues of back-to-back LCs for raw materials and other local services, despite the buyers did not pay the export values during the pandemic time.
As a result, not only a company is going bankrupt but also the employment of thousands is becoming uncertain, he added.
“Such uncontrolled catastrophic incidents can happen at any time but all the liabilities bestowed on the exporters. It is not expected at all,” he said.
“As the exporters have no control over the incident, occurring frequently and having no proper exit policy in our country, I would like to draw the attention of the policy makers to give utmost importance to legal protection of the exporters in these circumstances,” Faruque said. He further said the deadly fire at BM Container Depot Sitakunda is a big blow to the country’s apparel industry after the Covid-19 pandemic and Russia- Ukraine war.
“Our image suffers more than the financial loss due to the fire incident. So, the authority should audit the off-docks on regular basis and bring them under intensive compliance,” BGMEA president said.
“Letters have been sent to the BGMEA member factories asking them to find out the amount of apparel of the burnt container at the BM Depot. So far, we have received information from more than 155 factories,” he said
The factories have been asked to apply to the Customs Bond Commissionerate for Duty exemption, he said.
“The burnt container contained products of several well-known and expensive brands and according to the export agreement, the goods kept in the depot were received by the respective brands and all the liabilities of the goods bestowed on the buyers,” he said.
Keeping it in mind, a buyer has already reportedly paid for the damaged clothing and the remaining brands will pay their dues to their suppliers as soon as possible, he hoped.
“At the same time, insurance companies have a lot of responsibilities in these situations and drawing attention of the companies, I would like to request to arrange the insurance coverage of the burnt goods as soon as possible,” he said.