Export oriented Garments Manufactures demanded to the government, exemption of tax at source for next five years, so that they could be competitive in the global RMG export markets.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA) demanded in their budget proposal for the fiscal year 2019-20.
Currently, the BD RMG exporters are paying 0.25% tax at source to the Government.
However, the Garments Manufactures also asked the government to reduce corporate tax from 12% to 10% for the next fiscal year.
“Global buyers are gradually reducing the prices of goods, while the production costs have increased by 29% due rise in workers’ wages since 2010 to 2018. While the manufacturers had to spent a lot in completing the safety remediation,” BGMEA president Md Siddiqur Rahman said.
As a result, it has become very difficult to compete with our competitors. In the given situation, the sector needs withdrawal of tax at source, he argued.
Increasing the investment to attain the $50 billion export earnings from RMG sector, the trade association called for lowering corporate tax from 12% to 10% for the next fiscal year.
BGMEA demanded withdrawal of value added tax (VAT) and 2% stamp duty on RMG export. It also called for withdrawing VAT on export oriented goods and services collected from local sources.
Meanwhile, in addition, Bangladesh Textile Mill Association (BTMA), the platform of the primary textile sector people wanted VAT exemption on locally manufactured fabrics and yarn as the production cost has gone up.
“Bangladesh was fully dependent on import of yarn and fabrics in meeting the local demands for both the export-oriented and local industry. But now, the sector is competing with the global market players and meeting the domestic demands,” BTMA president Mohammad Ali Khokhon said.
If the government imposes VAT on fabrics and yarn, it increases prices of fabrics and yarn leaving the manufacturers in tougher competitions, said Ali.
So, considering the present status, our demand is not to impose VAT on locally produced yarn and fabrics, he added.
The knitwear manufacturers do not want to pay source tax, they want to pay 0.5% tax on Cutting Making Charge and it should be settled as final tax.
The platform of the knitwear industry also demanded the continuation of 12% corporate tax for the sector and 10% for the apparel manufacturers, who are producing goods at a certified green building.
The BKMEA also proposed the government to keep the provision of duty-free import of spare parts for the sector and put them out of VAT preview.