BGMEA proposes 0.5pc source tax for next 5yrs
Staff Reporter :
Decline in apparel exports to US and EU markets is really hinting an alarming situation for the country’s readymade garments industry, said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan.
Following this, he reiterated his demand for cutting source tax on apparel sector to 0.50 per cent from 1 per cent in the upcoming budget for 2023-24 and keeping the rate continue for the next five years so that exporters can take long-term business decisions and can be more competitive globally.
The president of the apex body of the apparel sector came up with the demand at press conference at the BGMEA Complex in the capital on Thursday. BGMEA Vice-Presidents Syed Nazrul Islam, SM Mannan Kochi and Md Shahidullah Azim, among others, were present at press briefing.
Faruque also demanded a 12 per cent corporate tax on other income streams, such as gain on asset disposal, sub-contractor income and other income currently considered unaccepted income, and 30 per cent corporate tax rate at the time of assessment.
The other demands made by the BGMEA include a reduction of source tax on income of the Exporter Retention Quota Fund to 10 per cent from the existing 20 per cent and the withdrawal of 10 per cent tax on cash incentives.
The BGMEA president requested the government to keep special allocation in the next budget for providing 10 per cent cash incentive
on non-cotton apparel export to encourage investment in this potential sector. He also demanded withdrawal of the existing 7.5 per cent and 15 per cent Value-Added Tax (VAT) on recycling goods.
As per the data of the Export Promotion Bureau (EPB), apparel exports to US and European countries witnessed a negative growth in terms of quantity during the last four months (November, 2022 to February 2023) and it may continue for the next few months, he said.
Even, the international buyers are not giving any positive export projection due to drops in sales, excessive inventory and supply chain crisis in the major destinations, the BGMEA chief said.
“No alternative but to stabilize the export earnings amid the existing geo-political and economical turmoil situation caused by the ongoing Russia-Ukraine war. So, export-oriented sectors, especially RMG industry, must be given importance to protect overall economic growth of the country,” he said.
RMG exports reached $38.57 billion during the July-April of 2022-23 fiscal year, reflecting a 9.09 per cent increase compared to the same period in the previous fiscal year, according to the Export Promotion Bureau (EPB).
In April, however, the country’s RMG exports observed a significant decline of 15.48 per cent, amounting to $3.32 billion compared to April 2022.
Meanwhile, the textile and apparel industry in the country incurred losses, and many players saw lower profits in the January-March quarter of the current fiscal owing to energy shortage, strong dollar and a slowdown in global market demand caused by the Russia-Ukraine war.
