Thanks to the prevalent uneven tax policy, many apparel makers, who manufacture for an exporter and whose product offerings are ultimately exported, do not show their actual income as they risk tariffed 30 per cent corporate tax plus 15 per cent value-added tax on labour and raw materials for sub-contract.
Media reports maintained this adding neither the BGMEA nor BKMEA have any data on the actual number of apparel factories that take sub-contracts.
However, speaking to the media, BKMEA Executive President Mohammad Hatem, reportedly, underlined that there are about 450 knitting factories involved in sub-contracting, while their production amounts to 10 per cent to 15 per cent of total garment export and went on to add since the products ultimately go to the foreign market, an additional two and a half times tax on the factories is discriminatory.
Meanwhile, a Managing Director of one such sub-contracting unit, reportedly said the tax policy for the readymade garment sub-contractors is discriminatory, compelling many sub-contractors not to show their income.
