BGMEA demands eliminating source tax for at least two years

Bangladesh garment industry owners demand withdrawal of 0.7 percent source tax on export for at least two years to help them sail through choppy waters brought about by the uncertain global prospects and the need for remediation of structure .

Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association at a pre-budget consultation meeting organised by the National Board of Revenue said that once the situation improves they will start paying the source tax again.

He further added that the policy for the garment sector should be made for a minimum five-year period. Changes in policy every year create a lot of problems for them.

Rahman also called for keeping the export sectors out of the purview of VAT to avoid unnecessary harassment for businessmen. He urged the government to relieve them from unnecessary harassment.

Different other associations including Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), Bangladesh Jute Goods Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA) and Exporters Association of Bangladesh (EAB) attended the meeting.

In the proposal, BGMEA put forward a 12-point demands which include slashing corporate tax to 10% from the existing 20% for the five years starting from next fiscal year.

BGAPMEA urged the government to allow duty-free import of pre-fabricated building material under bonded facility in the next budget to ensure workplace safety.

BGAPMEA President Md Abdul Kader Khan said that manufacturers of garment accessories are facing pressure from global retailers in making factories safe. Now a good number of pre-fabricated buildings need to be painted with fire-proof quoted paint.

BGAPMEA leader also demanded duty-free import of fire-resistant doors, sprinkler system and equipment and emergency lights with exit signs to ensure safety compliance.

BTMA Secretary General Feroz Ahmed urged the government to withdraw the minimum tax of 0.30% according to Income Tax Ordinance section 82 (C) without profit calculation. However, many of them are not making profit in recent year. The sector is also paying 15% corporate tax.

BKMEA First Vice President AH Aslam Sunny demanded reduction in corporate tax to 15% from existing 35%.

NBR Chairman Md Nojibur Rahman said that the revenue board is trying to create appropriate atmosphere to implement the new VAT law from July 1.

The garment sector has maintained about 13 percent year-on-year growth on average over the last ten years but in recent months the growth has crashed down to nearly 2 percent, which is alarming for the sector as well as employment, said the BGMEA president.

The demand for clothing items worldwide declined 6 percent last year and 7 percent in the previous year as a result it has been negatively impacting the shipment of apparel items from Bangladesh.