In a move that would bring cheers amongst the garment manufacturers and exporters of Bangladesh, the Government has hinted towards slashing the source tax on export proceeds for all businesses including readymade garment sector to 0.25 per cent from 1 per cent for the current fiscal year of 2019-2020.
As per reports, the Government has advised the officials of the National Board of Revenue (NBR) to prepare a summary paper for Prime Minister Sheikh Hasina’s approval to cut export source tax to 0.25 per cent.
It may be mentioned here that garment manufacturers of Bangladesh have been lobbying to reduce the tax to 0.25 per cent after the passage of the budget in Parliament in June. They claimed that the tax reduction was the need of the hour to ensure continuation of the country’s garment items competitive edge amidst rising gas prices and fend off competitions from other players.
NBR officials, however, expressed fears that source tax collection from the US $ 40.5 billion-worth export earnings sector would decline, affecting the overall tax receipts, at a time when the revenue board was struggling to meet the revenue collection target.