Dhaka, Bangladesh
BGMEA demands removal of tax at source for 2 yrs

BGMEA demands removal of tax at source for 2 yrs

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Sunday demanded full withdrawal of tax at source for two years, reports BSS, reports BSS.
The trade body of country’s apparel sector made the demand at a post-budget press conference at its office, as 1 percent tax has been imposed at source for the readymade garments (RMG) in the proposed budget for fiscal year 2017-18.
“Country’s apparel industry is passing through an adverse situation and full removal of tax at source for at least two years is needed to overcome the scenario,” said BGMEA President M Siddiqur Rahman.
Referring to their proposal regarding the tax, he said: “Tax at source was not removed and even reduced. Rather it has been increased to 1 percent from 0.70 percent fixed especially for the RMG which is totally frustrating for us.”
Siddiqur said the new tax will make the business of this sector tougher towards attaining the desired growth.
He requested the finance minister to fix the tax at source at zero percent for next two fiscals.
Welcoming the finance minister’s move of trimming down the corporate tax at 15 percent from 20 percent, the BGMEA President urged the government to cut it to 10 percent considering the competence of RMG at present scenario and continue it for next five years.
“Apart from the existing facilities, we want additional 5 percent cash incentive on the export value of FOB for next two years which will be applicable for only the members of BGMEA and BKMEA to protect country’s apparel industry,” said Siddiqur.
Other leaders of the sector were also present at the press conference.
Last month, BGMEA demanded that the readymade garments sector be kept out of the purview of tax at source for next two fiscals since the industry experienced a gradual drop in export growth in past few years. The organisation’s President Siddiqur Rahman described the current market situation as ‘critical’ and made some more demands at a press conference at the BGMEA building in the city.
The BGMEA’s other demands include:
Halving 20 percent corporate tax for next five years.
Extra 5 percent incentives for BGMEA and BKMEA.
Adopting a stable revenue policy to encourage investors.
Finance Minister AMA Muhith had proposed 1.5 percent tax at source on all products, including RMG, for 2016-17 fiscal year, but later cut it to 0.7 percent following demand by businesses.
BGMEA President Siddiqur said the average growth of export in RMG sector was 13 percent in past 10 years, but it dropped to 2.21 percent in the current fiscal.
He blamed unsuccessful bids to enter new markets, the crisis of gas and power supply, and high rates of interest on bank loans for the fall.
According to him, 1,200 RMG factories were closed in past four years, and around 400,000 workers lost jobs.
Stressing the need for withdrawal of the tax at source on RMG products to help the sector stay in the world market, he said, “Taxes are paid on yarn, cloth, accessories, washing and end products. How many times will we have to pay tax on the same product?”
The $28 billion RMG sector contributes to around 80 percent of Bangladesh’s total export.
The BGMEA president said the export from the sector is decreasing in a ‘worrying’ rate due to ‘silent recession’ in the US and European Union countries, the major markets for Bangladesh’s RMG products.
Export from this sector dropped by 6.8 percent to the US and 5.91 percent to the EU countries.

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