Readymade garment (RMG) manufacturers of the country demanded the reduction of the source at taxes applicable against the exports from existing 1.0% to 0.50% and effective for the next 5 years in the upcoming national budget of the FY2023-24.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), demanded it while speaking at a press conference on the current issues regarding the apparel industry in the capital on Thursday.
He also said that by doing this, the manufacturers can confidently undertake mid-term business and investment plans.
He also called for the imposition of corporate tax rate of 12% instead of the normal rate (30%) by considering other incomes, such as Gain on Assets Disposal, sub contract income, and miscellaneous expenses as unacceptable during the assessment of the garment industry.
He also stressed the rate of deduction of income tax at source should be reduced from 20% to 10% from the fee paid for the growth and development of exports from ERQ (Exporter Retention Quota Fund) for the greater interest of the export trade.
He demanded the withdrawal of 10% tax on the cash assistance in export of ready-made garments, saying that since cash assistance is not a business income, it is logical to keep the cash assistance out of the ambit of tax.
Regarding the demands, BGMEA President said that the global economy is passing through a turbulent situation due to the inflationary pressure and hike in fuel price which curtailed the purchasing capacity of the consumers.
Riding on the above causes and others, the export earnings from the apparel sector saw negative growth in March and April by 1.04% and 15.48%, respectively, he added.
In the major markets, though the export earning grew narrowly as per value since November, it decreased as per volume, he added saying that the negative trends may be prolonged for the next months.
In the current geopolitical and economic crisis, there is no alternative to sustaining export earnings and sustaining growth, he added saying that to sustain this, they have to focus on non-cotton or man-made fibre.
In this regard, they demanded to provide special incentives at the rate of 10% (of export value) on exports of non-cotton garments in the budget of the next financial year 2023-24.
He also demanded 1% duty concession on import of all solar PV system equipment for setting up environment-friendly and energy-efficient industries.