Proposed hike in tax at source irks exporters
Monday, 11 June 2012
FE Report
Leaders of Exporters Association of Bangladesh (EAB) Sunday expressed their grave concern over the proposed hike in tax at source for export-oriented industries in the budget proposal for fiscal year (FY) 2012-2013, saying that it will have a negative impact on the sector.
They said the proposal has come at a time when the country's foreign currency earning sector has been facing a tough period due to different issues like Euro zone crisis and other international financial turmoil.
According to the budget proposal which was placed by Finance Minister AMA Muhith Thursday last at parliament, the government proposed 1.20 per cent tax at source on all types of export for the coming FY instead of the existing 0.6 per cent tax.
The EAB leaders also requested the government to pay serious attention to the matter and reconsider the proposal to help the US$ 19 billion industry maintain growth amid the economic meltdown in the world.
"Cent per cent tax hike at source on export-oriented industries is completely detrimental to the sector," EAB President Abdus Salam Murshedy said at the press conference in the city.
"Bangladesh's garment export to the EU markets has gone down by nearly 15.40 per cent while shipment to the USA has recorded a 28.40 per cent fall in the current year," he added.
At the press conference EAB leaders made their earnest request to the Prime Minister to revise the proposed tax downward.
The EAB leaders said people think that the export-oriented industry earns 12 per cent profit. According to the budget, the industry will have to pay 10 per cent tax and 1.20 per cent tax at source. But actually, garments industries and factories make 0.50 to 1.0 per cent profit on their export price.
Mr Murshedy said that the government should reconsider the proposal as it would create another hurdle for the garment industry which accounts for about 80 per cent of the country's total export earnings.
"The normal progress of the textile industry will seriously be hampered if such increase is imposed," said President of Leather-goods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) Syed Nasim Manzur.
The EAB leaders, however, hailed the government for proposing introduction of zero duty instead of the existing 1.0 per cent duty on import of capital machinery.
In the meeting, the leaders also hailed the government for proposing zero duty instead of the existing 1.0 per cent duty on import of industrial equipment and allocation of Tk 0.5 billion for skill development.
Besides, they also hailed the government for taking different initiatives like raising allocation for industrialisation, education and poverty alleviation.
Leaders of Exporters Association of Bangladesh (EAB) Sunday expressed their grave concern over the proposed hike in tax at source for export-oriented industries in the budget proposal for fiscal year (FY) 2012-2013, saying that it will have a negative impact on the sector.
They said the proposal has come at a time when the country's foreign currency earning sector has been facing a tough period due to different issues like Euro zone crisis and other international financial turmoil.
According to the budget proposal which was placed by Finance Minister AMA Muhith Thursday last at parliament, the government proposed 1.20 per cent tax at source on all types of export for the coming FY instead of the existing 0.6 per cent tax.
The EAB leaders also requested the government to pay serious attention to the matter and reconsider the proposal to help the US$ 19 billion industry maintain growth amid the economic meltdown in the world.
"Cent per cent tax hike at source on export-oriented industries is completely detrimental to the sector," EAB President Abdus Salam Murshedy said at the press conference in the city.
"Bangladesh's garment export to the EU markets has gone down by nearly 15.40 per cent while shipment to the USA has recorded a 28.40 per cent fall in the current year," he added.
At the press conference EAB leaders made their earnest request to the Prime Minister to revise the proposed tax downward.
The EAB leaders said people think that the export-oriented industry earns 12 per cent profit. According to the budget, the industry will have to pay 10 per cent tax and 1.20 per cent tax at source. But actually, garments industries and factories make 0.50 to 1.0 per cent profit on their export price.
Mr Murshedy said that the government should reconsider the proposal as it would create another hurdle for the garment industry which accounts for about 80 per cent of the country's total export earnings.
"The normal progress of the textile industry will seriously be hampered if such increase is imposed," said President of Leather-goods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) Syed Nasim Manzur.
The EAB leaders, however, hailed the government for proposing introduction of zero duty instead of the existing 1.0 per cent duty on import of capital machinery.
In the meeting, the leaders also hailed the government for proposing zero duty instead of the existing 1.0 per cent duty on import of industrial equipment and allocation of Tk 0.5 billion for skill development.
Besides, they also hailed the government for taking different initiatives like raising allocation for industrialisation, education and poverty alleviation.