CHITTAGONG, March 20: The government will provide cash incentive at the rate of 0.25 per cent to the readymade garment (RMG) industries to overcome the fallout of Rana Plaza collapse and Tazreen Fashion fire.
Commerce Minister Tofail Ahmed announced this at the inaugural session of the CAFAXPO (Chittagong Apparel, Fabrics and Accessories Exposition) in the city. The Minister formally opened the three-day exposition at Gymnasium ground of the MA Aziz Stadium as chief guest this morning.
Besides, the government has decided to reduce tax at source to 0.3 per cent from the existing 0.8 per cent. In case of new product and market exploration, the cash incentive has been enhanced to 3 per cent from 2 per cent which will help the RMG sector save at least Tk 11.00 billion, he said.
Emphasising on setting up of garment villages in near future, he said. "There is no alternative to setting up of garment villages. I will start process of setting up a garment village in Chittagong at the earliest possible time as we will have to come out of the idea of shared building."
China has agreed to provide soft loans to set up the garment village, he informed.
Tofail Ahmed said Bangladeshi readymade garments are now placed in the front row in Europe. "In spite of creating widespread political violence, the opposition political parties could not frustrate the move forward by the country's major export sector," he said.
"In such a situation, the government has come forward to extend all-out support to the garment exporters who have been keeping the wheels of export running."
He said currently the contribution of the RMG sector is US $22.00 billion in the overall export earnings of $30.00 billion in the country. The export earnings from the RMG sector would stand at $30.00 by the year 2015, he expected.
The Minister expressed his firm conviction that the sector would fetch as much as $50.00 billion from export of readymade garments by the year 2021.
He was, however, disappointed that Chittagong having the major seaport has only 300 garment factories. "Only 300 RMG factories are in operation which is not befitting for the port city. Other factories located outside Chittagong have to export finished products through this port. So the businesses could have set up much more RMG factories here," he said.
In his address, CAFAXPO-2014 president and first vice president of the Bangladesh Garment Manufacturers and Exporters Association Nasir Uddin Ahmed Chowdhury said the garment industry has immensely contributed to the port operations as the container handling has increased to 1.6 million TEUs (20 foot equivalent unit) from only 0.3 million. "Our competitors have advanced far ahead of us by capitalising on the hostile campaign launched worldwide against us following the incidents of Rana Plaza collapse and Tazreen Fashion fire," he said.
State Minister for Land Saifuzzaman Chowdhury Javed and City Awami League president and former mayor ABM Mohiuddin Chowdhury also addressed the function as special guests.
