BGMEA to seek 0.3% tax at source in next budget
রবিবার, এপ্রিল ৩, ২০১৬
Desk Report : The country’s apparel manufacturers said they would demand 0.3% tax at source in the next fiscal year’s budget to remain competitive in the global market and uphold export growth as the production cost has increased due to safety standards improvement work.
Currently, the largest export sector of Bangladesh is paying 0.6% tax at source, which was 0.3% earlier. Bangladesh Garment Manufacturers and Exporters Association made the call in its budget proposal for the fiscal year 2016-17.
The proposal will be placed to the National Board of Revenue (NBR) next week.
The apex body of ready-made garment industry also sought a five-year extension for reduced tax benefit for the country’s apparel makers.
“Prices of apparel products continued to slide in the global markets including the US and the European Union while production cost has risen by 12%,” BGMEA Vice-President Mahmud Hasan Khan Babu told the Dhaka Tribune
As a result, RMG sector is going through a huge pressure to remain competitive with the global competitors, he added.
“Considering all the issues, we call for the government to cut tax at source to 0.30% from existing 0.60%.”
According to the BGMEA, the price of Bangladeshi RMG products has been cut by 2.45% in the US market and 0.87% in the EU market during January-July period last year.
Euro was devalued by 11.87% against US dollar in the last one year.
Following the collapse of Rana Plaza building, RMG manufacturers had to invest a lot of money to improve safety standards in the field of fire, electrical and structural safety.
Since production cost went up, manufacturers demanded duty-free import of fire safety equipment to meet safety conditions outlined by the Accord, the Alliance and the National Action Plan (NAP).Currently, they are paying 5% tax on safety equipment.
The use of fixture is a must for setting LED light that helps reduce electricity consumption.
To help the export-oriented RMG sector, the government should provide reduced tax benefit for the import of LED lights and other related products, said Hasan.
Talking on the upcoming budget, another BGMEA Vice-President Mohammad Nasir said the government has provided a lot of incentives for the sector, but due to slowdown in global economy, the sector needs policy support.
If all policy supports are met in the next budget, Bangladesh RMG sector will be able to earn $50 billion by 2021, added Nasir.
The government has set the target of becoming a developed country, he said, adding that more employment is the key to achieving the goal.
“I hope that the budget would be investment friendly and it would help create jobs.”
At present, the $25.5 billion RMG sector employs about 4.4 million people, of which 80% are women, mostly from rural areas. Source : Dhaka Tribune