Exporters Association of Bangladesh (EAB) Saturday sought withdrawal of 1.0 per cent tax at source on export proceeds, saying it would hinder the growth of the country's largest foreign currency earner apparel and textile sectors.
Terming the proposed hike of such tax to 1.0 per cent from 0.30 per cent not time-befitting, EAB President Abdus Salam Murshedy in a statement said, "Bangladesh will lose its competitiveness in the global market and its potentiality will also be hampered in future due to such decision."
The competitors are witnessing comparatively better growth in garment exports than that of Bangladesh, he said, adding that Bangladesh's garment sector is facing tough competition following the EU's generalised system of preferences (GSP) plus facility granted to Pakistan and signing of Trans-Pacific Partnership (TPP) deals of Vietnam, Taiwan and the Philippines with the USA, Canada, Japan, Australia, Singapore and South Korea.
The devaluation of euro and appreciation of local currency against US dollar already eroded the locally-made apparel products' competitiveness in the European Union and US markets, he noted.
If the proposed source tax is slapped, the sector would further lose its competency, he said, and demanded continuation of 0.30 per cent tax at source.
He, however, criticised the proposal to impose 1.0 per cent duty on import of capital machinery for the apparel industry, saying that it would discourage investment.
The government withdrawn VAT on fire safety equipment, but frustratingly it imposed 5.0 per cent duty on them, he said and demanded withdrawal of duty on such equipment to help ensure workplace safety in the factories.
The EAB, however, hailed the proposed budget for withdrawing 15 per cent VAT on fire safety and electrical equipment, import of pre-fabricated building materials and continuation of support under the second incentive package.
According to another report, opposing the proposed hike in the rate of source tax on export proceeds, Bangladesh Frozen Food Exporters Association (BFFEA) has demanded withdrawal of 1.0 per cent such tax.
Currently, 0.60 per cent source tax is applicable for the sector and the industry people in the pre-budget meetings demanded imposition of 0.30 per cent tax which is similar to that of the readymade garment (RMG) sector.
"The proposed tax will aggravate the financial crisis of the frozen food export sector that has been experiencing negative growth for the last eight to nine months due to lower prices of shrimp in global market," BFFEA Acting President Md Golam Mostafa said in a statement issued on Friday.
The fish exporters lost 40 per cent of their capital due to falling prices of frozen shrimp over the last several months, he added.
Instead of such hike, the tax should be raised gradually, he said requesting the finance minister to impose a minimum amount of tax at source on frozen food exports.
The BFFEA president, however, hailed the proposed budget terming it business and investment-friendly.
"It will help boost economic and employment opportunities if the government becomes capable of implementing the proposed budget for the fiscal year 2015-2016," he added.
munni_fe@yahoo.com
Plea to drop 1.0pc tax at source on exports
FE Report | Published: June 07, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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