The Fashion Entrepreneurs Association of Bangladesh has protested against a proposal to increase value added tax (VAT) on the apparel items of local brands in the proposed budget for the financial year 2018-19.
The organisation in a press release issued on Friday said that such a proposal of increasing VAT to five per cent from four percent would pose a serious threat to the local apparel industry that engages marginalised people of the country.
Finance minister AMA Muhith on Thursday in the proposed budget for financial year 2018-19 increased VAT on apparel items of local brands by one percentage points and imposed five per cent VAT on non-branded apparel items.
The local apparel sector entrepreneurs have long been pressing the government to cut the VAT rate.
FEAB in the release said that the local buyers would turn off in the face of increased VAT rate and the imported apparel products would occupy the market.
The association demanded withdrawal of VAT from local garments. Any move to realise increased VAT before the budget is approved would create unrest in fashion market. This would also create pressure on shoppers ahead of Eid, it mentioned.
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