Budget: BGMEA wants source tax unchanged for 5 years
Publish- June 11, 2020, 10:32 PM
UNB NEWS - UNB NEWS
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday urged the government to keep the source tax unchanged at 0.25 percent for another five years.
Finance Minister AHM Mustafa Kamal, while placing the proposed national budget for 2020-2021 fiscal year, suggested source tax for exporters at 0.5 percent.
In its immediate reaction, the BGMEA highlighted that the source tax was reduced and re-determined at the rate of 0.25 percent at the request of the garment industry only last year.
They urged the government not to increase the rate.
The apex body of the country's apparel sector praised the Finance Minister for trying to outline a realistic budget going beyond the traditional one.
The BGMEA sought swift distribution of working capital loan assistance package of Tk 20,000 crore for Small and Medium Enterprises (SMEs) and Tk 30,000 crore for large scale industries through commercial banks.
It also requested the authorities to reconsider the proposal of exempting VAT and return filings on locally collected goods and services.
They called for the complete withdrawal of the five percent income tax deduction against cash assistance introduced in the new budget.
The BGMEA said it thinks that newly introduced rule of issuing Statutory Regulatory Order (SRO) through a certificate from the departmental VAT officer will only cause confusion in clearing imported goods.
It requested the government to amend the proposal and keep issuing SRO for unloading the goods on the basis of certificate issued by BGMEA.
Bangladesh readymade garment industry, which employs over four million workers, helps earn around 83 percent of the export earnings.
Bangladesh was eyeing to earn US$ 50 billion by exporting apparel products which is now more than $32 billion every year.
The government has announced a $588 million stimulus package for the RMG sector to pay wages.
The Finance Minister proposed to continue with additional export incentive of 1 percent in the next fiscal year in addition to existing incentives.
Placing the proposed budget for the fiscal year 2020-2021 on Thursday, he said the government has kept on providing all kinds of benefits, including cash incentives, to the readymade garments (RMG) industry as it is the principal export sector of the country.
An additional 1 percent export incentive is being provided to all categories of RMG exports from 2019-20 FY.