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FY21 Budget Proposals

BGMEA, BKMEA for keeping source tax at 0.25pc unchanged

Staff Correspondent | Published: 23:08, May 19,2020

 
 

The country’s apparel makers have demanded that the government continue with the existing reduced rate of source tax (0.25 per cent) and corporate tax for the next five years so that the sector could remain competitive on the global market by overcoming the coronavirus outbreak fallout.

Leaders of the readymade garment sector recently placed a number of budgetary proposals including special policy support for the sector to fight the negative impact of coronavirus pandemic.

In separate budget proposals to the National Board of Revenue, the Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association sought the continuation of existing 0.25 per cent source tax.

The trade bodies also demanded the continuation of reduced 10 per cent and 12 per cent (green factories) corporate tax for the next five years.

The BGMEA placed 12-point proposals for the next budget to help the sector to bring back the export earnings growth on the positive track.

The trade body in its budget proposal said that Bangladesh export witnessed a 6.21-per cent negative growth in the July-December period of the financial year 2019-20 while its competitors Vietnam and Pakistan grew by 5.85 per cent and 5.25 per cent respectively in the same period.

The BGMEA said that it would be difficult for the industry to remain competitive on the global market due to the rising cost of doing business in Bangladesh.

The trade body demanded duty-free imports of industrial racking system, industrial thermostat dehumidifier and other safety equipment.

Setting up an international-standard industrial racking system would helpful for the sector to gain more global orders as  the IRS helps to store huge quantity of products at a short space and to find them out easily in a bonded warehouse.

The BKMEA in its budget proposals demanded 10 per cent cash incentive for using local raw materials and 4 per cent cash incentive for using imported ones for the next two years.

BKMEA senior vice-president Mohammad Hatem said that they needed special policy support to survive on the global market amid the pandemic as the global demand was expected to decline by 40 per cent that would result in a price fall of products. The trade body also proposed that the government should provide an exit plan for the entrepreneurs in the upcoming budget with a special allocation as a good number of factories would be shut down in the next one year.

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