In a recent pre-budget meeting held at the National Board of Revenue (NBR) headquarters in Agargaon, Dhaka, NBR Chairman Abdur Rahman Khan raised questions regarding the longstanding tax benefits enjoyed by the RMG sector, which has been receiving a reduced tax rate for five decades.
He expressed concerns about the disparity in tax rates, noting that most other sectors are subject to the standard tax rate, while the RMG sector continues to benefit from lower rates.
The chairman urged exporters to transition to the standard tax rate, emphasising that companies only need to pay taxes based on their profits, and if they incur losses, they are exempt from taxation.
Currently, the RMG industry pays a 1 per cent source tax on export value, with garment and textile industries taxed at 12 per cent and green factories benefiting from a reduced rate of 10 per cent.
In response, Anwar-Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries and former president of the Bangladesh Garment Manufacturers and Exporters Association, defended the sector. He highlighted that manufacturers are required to pay taxes even in the event of losses. In his written proposal, he called for a reduction in the export tax rate by half from the current 1 per cent.
