The country's ready-made garment (RMG) product exporters have sought tax benefit on import of fire safety equipment and relocation from shared buildings to stay competitive and compliant to the international buyers.
Leaders of the sector said the foreign buyers have tagged the condition of relocating the RMG industries from shared buildings within the shortest possible time for continuation of their import from Bangladesh.
"Around 40 per cent of the RMG units are currently situated in shared buildings. We have to shift those in phases by next four years," Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Atiqul Islam said at a pre-budget meeting Thursday.
The National Board of Revenue (NBR) held the pre-budget meeting with the RMG, knitwear and textile sector businesses to review their proposals for fiscal year 2014-15 budget.
NBR member Md Farid Uddin chaired the meeting on the revenue board premises.
At the meeting, the BGMEA president said export orders worth around US$ 110 million have been cancelled by foreign buyers due to delay in meeting the compliances.
Mr Islam sought tax benefit for import of materials for pre-fabricated building for RMG factories. Currently, duty on the materials is around 61 per cent.
"We are intensifying efforts to meet the compliances. Already 13 buildings of RMG factories faced closure following recommendation of inspection teams," he said.
He sought exemption of VAT on fire doors and LED lights. The rate for them is currently 15 per cent and 31 per cent respectively.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) first vice president Mohammad Hatem proposed to simplify the auditing system, increase the time-frame for paper submission by companies to six months from the existing three months.
He also proposed to make the VAT exemption system simpler by scrapping the rebate system that fuels corruption.
Responding to a query, Mr Farid, chair of the meeting, said the VAT collection system would be simplified and integrated in the next two years.
Mr Hatem sought reduced VAT on service charges, security services, contractors' bills to 4.5 per cent from the existing 15 per cent.
Both the BGMEA and BKMEA leaders have proposed to deduct the tax at source on export value and withdraw tax on raw material supply.
They termed the system 'double taxation' for the exporters.
The BKMEA leader questioned the justification of VAT return submission as the sector was exempted from payment of VAT.
Bangladesh Textile Mills Association (BTMA) president Jahangir Alamin proposed tax benefit for raw materials for textile sector to grow import substitute-exporting industry.
He said VAT is exempted from cotton, but it is imposed at 15 per cent rate on local supply to sister-concern companies as taxmen consider it as 'sale'.
"Cotton is not available locally. Sometimes companies have to borrow the raw material from its sister concerns, so VAT should be exempted from the item," he added.
Terry towel exporters sought tax exemption from cash incentives for exporters and waiving of tax on local L/Cs.
Bangladesh Plastic Association sought UP (utisation permission) and reduction in tax at source on export to 0.30 per cent from 0.80 per cent.
Bangladesh Cloth Merchant Association sought reduction in supplementary duty (SD) to 20 per cent from 30 per cent on import of cloths.
Jute association, jute goods association, jute mills association have sought tax benefits for the sector and simplification of the 'duty drawback' facility.
Jute spinner association representative Humayun Kabir proposed lowering the tax at source for the sector to 0.10 per cent from the existing 0.80 per cent.
