Exporters want withdrawal of income tax at source
Saturday, 19 June 2010
FE Report
Exporters Association of Bangladesh (EAB) demanded withdrawal of 1.0 per cent income tax at source on export items that has been proposed in the new budget for the next fiscal year in a bid to spur overseas sales.
Any rise in tax at source will slow down exports as it will increase cost of production and the exporters will lose global competitiveness, the sectors' leaders feared.
Instead, the government can continue with the existing 0.25 percent tax, suggested Abdus Salam Murshedy, the EAB president, at a post-budget press briefing in the city on Thursday.
"If the new proposal for raising such tax comes into effect, the cost of production of export-oriented goods will be go up. But, overseas buyers are not yet ready to pay any extra amount now, as they are still struggling to recover from the economic recession," he said.
Moreover, the government should give a certain percentage of subsidies in diesel and furnace oil purchase as the factory owners can hardly utilise full capacity because of shortage of gas supply and frequent outages of power, added the export-oriented sector's leaders.
The EAB leaders also demanded to lower the bank interest rate to 7.0 per cent for the exporters along with their demand of setting up central ETP (effluent treatment plant) from where all the factories will get connections like in Sri Lanka and Korea.
The apparel makers raised their voice to demand not to finalise the budget proposal for a 15 per cent VAT (value-added tax) on the rented floor space of garment factories.
Such VAT imposition will hit hard the small and medium garment factories because the majority of those are set up on rented space, Murshedy who is also the president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said.
"So, we demand withdrawal of 15 percent VAT on rented floor space and continuation of tax at source at 0.25 per cent instead of proposed 1.0 per cent."
Frozen shrimp exporters demanded special 50 per cent subsidy from the stimulus package for the operational factories to help them narrow down capital deficit as they risk bankruptcy that could cost thousands of jobs in rural areas.
Leaders of packing and accessories manufacturers said the government should withdraw the mandatory rule to print 'bond item, not for sale' on the imported raw materials.
Leather and leather goods leaders demanded Tk 2.50 billion fund to relocate the tanneries at Savar from Hajaribagh.
Exporters Association of Bangladesh (EAB) demanded withdrawal of 1.0 per cent income tax at source on export items that has been proposed in the new budget for the next fiscal year in a bid to spur overseas sales.
Any rise in tax at source will slow down exports as it will increase cost of production and the exporters will lose global competitiveness, the sectors' leaders feared.
Instead, the government can continue with the existing 0.25 percent tax, suggested Abdus Salam Murshedy, the EAB president, at a post-budget press briefing in the city on Thursday.
"If the new proposal for raising such tax comes into effect, the cost of production of export-oriented goods will be go up. But, overseas buyers are not yet ready to pay any extra amount now, as they are still struggling to recover from the economic recession," he said.
Moreover, the government should give a certain percentage of subsidies in diesel and furnace oil purchase as the factory owners can hardly utilise full capacity because of shortage of gas supply and frequent outages of power, added the export-oriented sector's leaders.
The EAB leaders also demanded to lower the bank interest rate to 7.0 per cent for the exporters along with their demand of setting up central ETP (effluent treatment plant) from where all the factories will get connections like in Sri Lanka and Korea.
The apparel makers raised their voice to demand not to finalise the budget proposal for a 15 per cent VAT (value-added tax) on the rented floor space of garment factories.
Such VAT imposition will hit hard the small and medium garment factories because the majority of those are set up on rented space, Murshedy who is also the president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said.
"So, we demand withdrawal of 15 percent VAT on rented floor space and continuation of tax at source at 0.25 per cent instead of proposed 1.0 per cent."
Frozen shrimp exporters demanded special 50 per cent subsidy from the stimulus package for the operational factories to help them narrow down capital deficit as they risk bankruptcy that could cost thousands of jobs in rural areas.
Leaders of packing and accessories manufacturers said the government should withdraw the mandatory rule to print 'bond item, not for sale' on the imported raw materials.
Leather and leather goods leaders demanded Tk 2.50 billion fund to relocate the tanneries at Savar from Hajaribagh.