Apparel exporters demand additional Tk 11,724cr cash incentive a year

Staff Correspondent | Published: 00:00, May 28,2019

 
 

Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq speaks at a pre-budget press conference jointly organised by BGMEA, Bangladesh Knitwear Manufacturers and Exporters Association, and Bangladesh Textile Mills Association at Amari Hotel in Dhaka on Monday. BTMA president Mohammad Ali Khokon, BKMEA first vice-president Mansoor Ahmed and Exporters Association of Bangladesh senior vice-president Mohammed Hatem were present, among others. — New Age photo

Country’s apparel and textile sector leaders on Monday demanded additional Tk 11,724 crore cash incentives a year against readymade garment exports for next five years to remain competitive in the global market saying that RMG manufacturers were facing a precarious situation due to low prices of products.
At a pre-budget press conference at Amari Hotel in the city, the leaders of Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, and Bangladesh Textile Mills Association said that considering the special situation of the sector the government would have to take special measure for the sake of the employment of a vast number of people.
‘If we consider employment generation, the readymade garment sector needs incentive as the sector is facing a transitional period,’ the newly-elected BGMEA president Rubana Huq said.
She said that manufacturers have been facing continued pressure due to low prices from the buyers and survival of many small factories was at stake.
‘If the government allows 5 per cent cash incentive against the freight on board price of all garment products for the next five years the sector would rebound,’ Rubana said.
‘To allow an overall 5 per cent cash incentive for all markets the government would need additional allocation of Tk 11,724 crore for the RMG sector and it is not a big amount considering the contribution of the sector to the economy,’ BGMEA president said.
According to the finance ministry officials, the garment sector currently gets around Tk 3,000 crore to Tk 3500 crore a year as cash incentives against export.
Apparel exporters get 4 per cent cash incentive as an alternative to duty bonds and duty drawbacks, 4 per cent for apparel products export for the small and medium industries, 4 per cent for export of new textile and garment products and expanding export of textile items to new markets, markets other than the United States, Canada and the European Union, and 2 per cent cash incentive for exports of apparel products to EU market in addition to 4 per cent cash incentive.
BGMEA president also demanded export-friendly exchange rate for the export sectors, saying that competitiveness of the sector would be increased by 6 per cent if exporters received additional Tk 5 for per dollar.
Rubana urged the government to keep the source tax unchanged at the rate of 0.25 per cent and to reduce the corporate tax to 10 per cent from exiting 12 per cent.
The BGMEA president demanded special allocation in the coming budget for loan rescheduling facility for the garment and textile businesses.
She also urged the government to double the tenure of rescheduling for default loans.
Rubana demanded single digit interest rate of bank loans for the RMG exporters and proposed to form an emergency fund worth Tk 300 crore for the bankruptcy workup regime for the small and medium factories.
BTMA president Mohammad Ali Khokon demanded 15 per cent cash incentive from existing 4 per cent for the textile sector.
He also demanded 16 per cent cash incentive for the US market, saying that Bangladeshi exporters were losing their competitiveness in the market due to high tariff.
‘I hope Bangladesh Bank would announce incentive for the good borrowers as the national bank issued circular setting interest rate between 7-9 per cent for the defaulters,’ Khokon said.
BKMEA’s first vice president Mansoor Ahmed said although the export sector is free from VAT, exporters were facing harassment by the revenue officers.
Mohammed Hatem, senior vice president of the Exporters Association of Bangladesh, demanded 5 per cent cash incentive for all export sectors and a waiver from submitting VAT return. He also demanded to ease the procedure of cash incentive so that exporters can get the amount without any hassle.

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