Bangladesh Textile Mills Association has called for the withdrawal of taxes on export incentives, warning that the current system is placing undue pressure on the country’s textile and export-oriented industries.
Presenting proposals at a pre-budget meeting at the National Board of Revenue headquarters in Dhaka, BTMA President Shawkat Aziz Russell said taxing incentives contradicts the very purpose of supporting exporters.
He proposed reducing the tax at source on export earnings from 1% to 0.5% and abolishing the 10% advance income tax imposed on export subsidies. He also criticized the existing structure where taxes are applied at multiple stages but cannot be adjusted or carried forward, increasing the overall burden on businesses.
According to BTMA, cumulative taxation across the production chain—from cotton to yarn, fabric, and finished garments—raises the effective tax burden to between 12% and 14%, eroding competitiveness in global markets.
Mr. Russell also highlighted Bangladesh’s lag in man-made fiber (MMF)-based production, noting that around 70% of global apparel is now based on synthetic fibers. He urged the government to remove duties on key raw materials and extend bonded warehouse facilities to support the sector’s development.
Additional recommendations included simplifying solar panel imports by unifying multiple HS codes, ensuring monthly refunds of VAT and advance tax for exporters, and providing tax exemptions on LPG to reduce energy costs.
Responding to the proposals, NBR Chairman Abdur Rahman Khan said several digital initiatives, including online corporate tax return submissions, have already been introduced to ease compliance. He also noted that incentives have been extended to the solar energy sector.
BTMA further raised concerns over inconsistencies in the valuation of imported fabrics, calling for duties to be assessed based on actual import values to ensure fairness and transparency.
