Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Friday said the proposed budget didn’t spell out any specific direction for the country’s export-oriented textile and clothing industry.
Many of the proposals made by the trade body, including reducing source tax and budgetary allocation for incentive, have not been accommodated in the proposed budget for the upcoming fiscal year 2023-24.
BGMEA president Faruque Hassan said, “We didn’t find any specific instructions for the export-oriented textile and clothing industry in the proposed budget.”
He made the remarks while speaking at a press conference on the proposed national budget in Dhaka on Friday.
BGMEA has demanded to fix source tax at 0.50 per cent in the budget as the sector has been struggling to rebound from the Covid-19 fallout, he added.
He also said the apparel demand has decreased in the global market due to the high inflation caused by the Russia-Ukraine war.
The BGMEA president also said, “The withdrawal of cap on interest rate from next month would raise the cost of production. So, the local readymade sector would lose its competitiveness in the global market.”
He further said that the government should reduce the source tax to 0.50 per cent and continue the rate for the next five years and provide 10 per cent cash incentive on the exports of non-cotton apparel to help attract investment, increase exports and generate employment.
He again demanded reduction in source tax on income of the Exporter Retention Quota Fund to 10 per cent from the existing 20 per cent and withdrawal of 10 per cent tax on cash incentive.
He also urged the government to reconsider corporate tax at the rate of 12 per cent instead of 30 per cent to assess its members’ other incomes, including gain on asset disposal and sub-contractor income.
“One of our proposals was to keep the recycling process and products out of the purview of all types of tax and VAT as local RMG sector has the potentials of producing export products worth US$5 billion annually through recycling of post industrial waste. But, the proposal was also not reflected in the proposed budget,” Mr Hassan added.
He, however, termed some of the proposed budgetary measures ‘positive’ for the export-oriented industry that have been proposed in the next fiscal year 2023-24, including 15 per cent tax reduction on container import both for export and import, VAT exemption on cut and waste fabrics of artificial fibre at manufacturing level and amendment of the circular related to some products details and inclusion of some machinery parts in the Harmonized System (HS) code.
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