Budget FY27: BTMA demands withdrawal of tax on incentives
The Bangladesh Textile Mills Association (BTMA) has opposed the imposition of tax on incentives given to the export sector.
The organization has proposed reducing the tax at source on export earnings from 1 per cent to 0.5 per cent and abolishing the 10 per cent advance income tax imposed on export subsidies.
BTMA president Shawkat Aziz Russell presented these proposals at the pre-budget discussion held at the NBR building in the capital on Sunday.
Taxing on the incentives that are given to encourage the sector is contradictory to the incentive system, he commented.
Criticizing the existing tax structure on export earnings, he said that even after tax is paid at source, additional tax is imposed in the next stage, which cannot be adjusted (carried forward) to the next year.
As a result, it is creating additional pressure on industrial entrepreneurs.
Highlighting the issue of step-by-step taxation in the production process of the textile industry, the BTMA president said that taxes are being deducted at every level, from cotton to gray fabric, processed fabric to ready-made garments.
This brings the total tax burden to 12 per cent-14 per cent, which is reducing the competitiveness of the industry.
At the same time, NBR chairman Abdur Rahman Khan said that the system of submitting corporate returns online has been introduced and many facilities have been added online, which will be helpful for taxpayers.
Referring to the dominance of man-made fibers in the global market, Shawkat Aziz Russell said that although about 70 per cent of readymade garment in the world are based on man-made fibers, Bangladesh is lagging behind in this sector.
He demanded that some taxes imposed on raw materials be withdrawn for the development of this sector and that it be brought under bond facilities.
Emphasizing the use of solar to reduce energy costs, he said that there are multiple HS codes in the installation of solar panels.
Bringing them under one code will make the process easier for industrial entrepreneurs.
In response, the NBR chairman said that several facilities have already been provided in the solar sector.
In addition, highlighting the inconsistency in the pricing system of imported fabrics, the BTMA President said that different valuations are being made for bond and commercial imports of the same product, which is not logical.
He demanded that the duty be levied based on the actual import value.
Other proposals of the BTMA include ensuring monthly refund of VAT and advance tax for export-oriented industries and providing VAT and tax exemption on LPG.
