The country’s apparel exporters have demanded reducing source tax on readymade garment export to 0.25 per cent from 0.5 per cent for the next five years and accepting the tax as the final payment.
The Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association on Sunday in a joint letter sent to finance minister AHM Mustafa Kamal said that country’s RMG sector was passing through a tough time as global buyers cancelled orders worth more than $3 billion due to the cornavirus pandemic.
Considering the global pandemic situation, the RMG makers urged the government to reduce source tax to 0.25 per cent for the next five years for the sector.
They also demanded considering the reduced tax as the final settlement for the apparel exporters for the sake of country’s export business.
The source tax was set at 1 per cent for FY20, and the government reduced the tax rate to 0.25 per cent through a statutory regulatory order which expires today.
The finance minister on June 11 proposed tax at source at the rate of 0.5 per cent in the proposed budget for the financial year 2020-21 that was passed in parliament on Monday without any change regarding the source tax proposal.
The letter signed by BGMEA president Rubana Huq and BKMEA president AKM Salim Osman said that amid the severe cash crisis caused by the cancelation of global orders and deferred payment the sector was trying to continue export business through communicating buyers and the government.
It said that the global outbreak of the virus had created a disastrous situation for the RMG sector and its negative impact had already started hitting the economy.
‘Considering the national crisis caused by the coronavirus pandemic, we are seeking support from the government,’ the letter read.
The government in March, the first month of the detection of coronavirus infection in the country, announced the first stimulus package worth Tk 5,000 crore for the export sector to pay their workers wages.
Despite getting the interest-free financial support, the country’s apparel makers started workers’ retrenchment from the beginning of the coronavirus outbreak, violating the government instruction.
Moreover, the RMG factory owners have recently sent a letter to the finance ministry, demanding further stimulus to pay workers using COVID-19 as a pretext.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Apparel