Readymade garments (RMG) manufacturers and exporters in Bangladesh have sought a reduction in tax at source to 0.3 per cent from the current 0.6 per cent on export of apparel products.
Besides, it has also urged the National Board of Revenue (NBR) to set the income tax at a minimum rate of 10 per cent for the next five years, from the next financial year. Currently, the same is 35 per cent.
They have appealed to the revenue bureau to consider these above policy changes to be the final settlement from the Budget for fiscal 2016-17.
This plea was presented before the NBR by representatives of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), Bangladesh Jute Goods Exporters Association and other stakeholders at a pre-budget meeting, chaired by NBR Chairman Md Nojibur Rahman at the revenue bureau headquarters on April 19.
Representing the garment exporters, BGMEA President Siddiqur Rahman asked the tax authority to provide the facility for at least the next three years, hoping this would enable the RMG sector to bring about the much-needed change in the industry.
From 2005 to 2014, the garment manufacturers enjoyed a reduced corporate tax rate at 10 per cent under the special consideration. That has now been revised to align with the regular rate of 35 per cent from the fiscal 2014-2015.
Siddiqur Rahman argued that the benefits demanded by the apparel makers would enable non-compliant factories and factories in small buildings to shift to new, bigger and better buildings to survive, in the light of the innumerable number of restraints faced by these enterprises, following the Rana Plaza disaster and also due to conditions imposed by the Accord and the Alliance.
Echoing these demands, Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) President Abdul Matlub Ahmad said that the reduction in corporate tax will also enable RMG makers achieve the US$50 billion export target.
The RMG industry’s other demands included duty- and tax-free import of fire fighting equipment for compliant industries, withdrawal of VAT from purchase made through local letter of credit, extension on submission of audit document from the existing three months to six months and an end to alleged harassment in the name of auditing by Bangladesh Bank and Local and Revenue Audit Directorate of the government.
Meanwhile, the former president of BGAPMEA Rafez Alam Chowdhury also requested the NBR to authorise the association to give Utilisation Permission (UP) to its members and withdraw all kinds of tax, VAT and duty on import of construction materials to help build pre-fabricated buildings to ensure compliant industries.
Bangladesh Textile Mills Association (BTMA) general secretary Feroz Ahmed also spoke at the meeting, seeking withdrawal of 1 per cent duty on capital machinery import and 0.5 per cent minimum tax on gross receipts, and withdrawal of source tax from purchase made through local letter of credit.
