Government moves to review effectiveness of export subsidy, prepare guidelines

Staff Correspondent | Published: 00:00, Oct 23,2019

 
 

A file photo shows workers sewing clothes at a garment factory on the outskirts of Dhaka. The government has taken a move to review the effectiveness of existing export subsidies and prepare guidelines on offering subsidies to exporters in future.— New Age photo

The government has taken a move to review the effectiveness of existing export subsidies and prepare guidelines on offering subsidies to exporters in future.

The commerce ministry has already formed a six-member committee, consisting of representatives from Bangladesh Tariff Commission, Export Promotion Bureau, Bangladesh Bank and Federation of Bangladesh Chambers of Commerce and Industry to review the existing system regarding the subsidies and prepare the guidelines.

BTC member Mostafa Abid Khan is the head of the committee while the commission will act as the secretariat of the committee.

The commission has sought nomination from the respective agencies for the committee.

The committee will mainly prepare the guidelines for recommending alternative policy benefits in future considering the country’s probable graduation from the least developed country to a developing one.

It will also determine the alternatives to existing export subsidies and methods to offer benefits to exporters in post-graduation period, according to the committee’s terms of reference.

It will recommend offering export subsidies in line with the rules and regulations of the World Trade Organisation and international best practices.

The committee will also recommend enhancing the effectiveness of the existing export subsidies.

The government gives export subsidies in various forms, prominently in cash incentives and duty and tax benefits, to exporters to promote diversification of export products and keep the export competitive in the international market.

Products under 37 categories will get cash incentives ranging from 2 per cent to 20 per cent in the current fiscal year 2019-2020.

Almost all the export products including readymade garment, textiles, electronics, ICT services, leather goods, jute, handicrafts and pharmaceuticals, get cash incentives.

Export-oriented industries, mainly the apparel sector, also get bonded warehouse facility while others get duty drawback facilities.

Officials said that currently the cash incentives were usually given based on applications from the export-oriented sector.

Though the Tariff Commission gives recommendation to the commerce ministry after conducting analysis of the sectors, there is no set policy regarding offering cash incentives, they said.

They said the committee would prepare the guidelines considering the existing context and future developments in global and domestic economy.

The committee will soon start their activities on the issue, they added.

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