RMG exporters getting 14pc incentives not to avail special 1pc

Staff Correspondent | Published: 00:00, Oct 11,2019

 
 

The Bangladesh Bank on Thursday instructed banks not to issue one per cent special cash incentive to the readymade garment exporters who would avail 14 per cent cash incentives under four criteria.

The BB imposed a set of conditions in this regard, stating that if any appeal exporter availed 14 per cent cash incentives in four criteria — 4 per cent cash incentive in place of bonded facility and duty drawback, 4 per cent cash incentive for export-oriented small and medium apparel industries, 4 per cent cash incentive for exporting to new markets excluding the US, Canada and the European Union, and another 2 per cent additional incentive for apparel export in the eurozone, the exporter would not be entitled to get the one per cent special cash incentive.

However, there would be no bar on availing 4 per cent cash incentive in place of bonded facility and duty drawback and the special incentive simultaneously, said a BB circular issued on the day.

Besides, locally owned entities located in the export processing zones and economic zones would be entitled to avail the incentive against their exports in the EU, the US and Canada.

The BB circular said that the exporters must ensure at least 30 per cent local value addition to be entitled for the special incentive.

Among the others conditions, the BB circular said that the products manufactured in own factory of the exporter would be entitled for one per cent special cash incentive on net price of freight on board.

In September this year, the government decided to issue cash incentive against export of products under 40 criteria with a view to encouraging exporters.

The BB set the conditions in giving incentives as there were instances of misuse of such facility.

The government has provided around Tk 3,500 as cash incentive annually in recent years.

On Thursday, the BB also warned the banks as well as the officials of the exporters’ association of punitive measure for any misuse in disbursing cash incentive.

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