The apex apparel body BGMEA has urged the government for a reduction in source tax at 0.50 per cent from existing 1.0 per cent in the next budget.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) suggests that the proposed rate stay for the next five years.
It has also sought a 10-per cent special cash incentive on the export of apparel made of non-cotton or man-made fibre (MMF).
The trade group has requested a budgetary allocation in this regard to help attract investment and increase export earnings by diversifying products.
"There is no alternative but to stable export earnings and sustain its growth in the present geo-political situation and economic crisis and government policy support is needed in this regard," said BGMEA president Faruque Hassan.
Apparel export growth entered the negative territory last March, and April growth declined over 15 per cent, he added.
Despite Eid in April, earnings from remittance also witnessed over 16-per cent negative growth putting pressure on reserves, commented Mr Hassan.
He made a number of demands from a press conference held at the BGMEA's Uttara complex on Thursday.
BGMEA vice-presidents Syed Nazrul Islam, SM Mannan Kochi and Md Shahidullah Azim, among others, were present at the programme.
Mr Hassan claimed buyers' representatives in a recent meeting also did not provide any outlook for 2023, they rather cited huge inventory, sluggish demand and supply-chain crisis as major problems.
He apprehended that the overall global apparel market size might shrink in 2023 and government support would be imperative for local manufacturers to remain competitive in the global market.
In such a situation, if the sector gets more support, it could play a greater role for economy, the BGMEA chief said, adding that LDC graduation would restrict incentives.
"So, if we could raise investment in different potential sectors by providing incentive until 2026, it would be right strategy," he said, demanding a 10-per cent cash incentive on MMF-based garment exports.
The BGMEA also demanded a reduction in source tax on income of Exporter Retention Quota Fund to 10 per cent from existing 20 per cent and withdrawal of 10 per cent tax on cash incentive.
It demanded keeping the recycling process and products out of the purview of all types of taxes.
There was scope for the Bangladesh RMG sector to produce export products worth $5 billion per year through recycling post industrial waste.
The BGMEA also demanded 12-per cent corporate tax on other incomes such as gain on asset disposal, subcontractor income and others, and 30 per cent corporate tax rate is applicable in time of assessment.
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