Come July, the readymade garment (RMG) exporters of Bangladesh will have something to cheer about! According to the National Board of Revenue (NBR) officials, it might review the calculation of income tax at a reduced rate of 10 per cent, as part of the budget preparation, from July 2016.
Also Read – Government of Bangladesh increases tax at source on RMG exports
The National Board of Revenue (NBR) in June 2014 withdrew the 10-per cent tax calculation benefit for the RMG exporters and restored normal tax calculation system (where the tax rate is 35 per cent) in order to counter alleged tax evasion by the exporters through shifting profit from other industries to export earnings.
To facilitate the reduced tax calculation, NBR reportedly has sent a summary to Bangladesh Finance Minister Abul Maal Abdul Muhith, in which the revenue board is said to have explained the overall situation and demands of the RMG exporters, besides seeking the Finance Minister’s instruction on arranging a tripartite meeting with him on the issue.
Also Read – Bangladesh’s RMG export subsidy likely to be slashed
At present, the NBR deducts tax at source at the rate of 0.60 per cent on export proceeds of the RMG sector, while the income tax on other income of the companies is 35 per cent.
Earlier, the Bangladesh government increased the tax at source on export proceeds of readymade garments from 0.30 per cent to 1 per cent. In his budget speech in 2015, the Finance Minister proposed to impose 1 per cent tax on all export items including RMG and non-RMG, which evoked some strong reactions from the garment industry.
