Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the government to keep the source tax on export earnings unchanged for at least for next five years to help the sector overcome difficult moment.
BGMEA president Faruque Hassan made the appeal during a post-budget press conference at a city hotel on Monday.
BGMEA first vice president Syed Nazrul Islam, senior vice president S.M. Mannan (Kochi), vice president Md. Shahidullah Azim, vice president (finnace) Khandoker Rafiqul Islam and BGMEA directors were present.
The government has proposed increasing the source tax on export profits to 1 per cent from the existing 0.5 per cent in the next fiscal year 2022-2023.
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“If the industry sustains, revenue and new employments will be generated,” said the BGMEA chief, noting that the export volume is expected to reach US$ 41 billion in the outgoing fiscal year 2021-2022.
Hassan said overall revenue can be boosted without increasing source tax on expert earnings by raising capacity of the industry.
He also said they want to achieve export target of US$ 45 billion in the next fiscal year.
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The BGMEA chief also demanded 10 per cent special incentive on non-cotton garments export in an effort to encourage more export through investment in non-cotton sector.
Bangladesh total RMG exports’ 74 per cent are made of cotton while the global share of total textile consumption is only 25 percent.
The apparel makers say demand for non-cotton products is on the rise due to rapid change in consumers’ lifestyle and increasing demand for sustainable and environment-friendly products.
The BGMEA chief said they had a demand to withdraw 10 per cent tax and they still think it is logical to keep the cash incentives out the tax net as it is not an income through business.
Hassan also demanded zero duty on import of solar panels to promote environment-friendly sustainable growth of the industry. The government has proposed 1 percent import duty on solar panels for the fiscal year 2022-2023.
“This is now an industry of US$ 41 billion with government’s policy support,” he said, hoping that the government will consider the recommendations to help the industry grow further.
On BM Container depot fire, the BGMEA president said most of the containers destroyed in the fire were loaded with garment products. “This (fire) caused more damage to our image than financial loss.”