Business

BGMEA for keeping tax at source at 0.50pc


By BSS
Published : 18 Feb 2022 09:01 PM

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday demanded thar the government should keep the tax at source for the export-oriented RMG industries at 0.50 percent for the next five years.

The BGMEA also urged the government to keep the corporate tax rate for the general RMG factories at 12 percent and for the green factories at 10 percent for the next five years.

BGMEA President Faruque Hassan made the proposal at a pre-budget meeting with the National Board of Revenue (NBR) for the next fiscal year (FY23) held at the conference room of the NBR Bhaban in the capital’s Segunbagicha area on Thursday.

Presided over by NBR Chairman Abu Hena Md Rahmatul Muneem, NBR member (customs policy) M Masud Sadique, NBR member (VAT Policy) Zakia Sultana and NBR member (income tax policy) Shamsuddin Ahmed and BGMEA leaders were, among others, were present on the occasion.

Speaking on the occasion, the BGMEA president said that Bangladesh was able to face the challenges of COVID-19 much better than other countries of the world and the countrymen are now getting the benefits.

“Now our exports have increased compared to the pre-COVID period,” he added.

Mentioning that export earnings are now fetching around $5 billion per month, he said there is a scope for further increasing this export volume.

He mentioned that the entrepreneurs of the RMG sector are now facing various challenges like the request for reducing the price of products.

Under the circumstances, Faruque proposed for keeping the tax at source at 0.50 percent, corporate tax rate at 12 percent for the general RMG factories and at 10 percent for the green RMG factories over the next five years.

He also urged the government to withheld the 10 percent income tax against cash support to the entrepreneurs of this sector.

Noting that there are some problems in export of products, the BGMEA President said if there is any problem with HS code, then there is problem in making shipment, which ultimately delays products delivery.

Under the circumstances, he requested the NBR to speedily release the RMG products.

Faruque said that the demand of yarn has increased following increase in orders in the post pandemic situation.

“But, the local yarn producers can supply only 2% of the demand. So, the local entrepreneurs are now taking steps to increase the production of yarn. But, there is now some difficulty in the ports while importing cotton from neighboring India.” He added.

Under the circumstances, the BGMEA President requested the NBR Chairman to simplify import and export procedures and thus facilitating the businessmen.

In response, the NBR chairman said that the RMG owners are now getting huge orders since the government had facilitated the factory owners with various facilities to face the challenges of the COVID-19 pandemic.

“We also want your prosperity. We want to facilitate your import and export operations. But, we won’t be able to make such facilitation in a wholesale manner as some can make misuse of such facility,” he added.

Muneem assured the RMG leaders to resolve the HS code related difficulty in exporting RMG products.

He also assured them of simplifying the procedure of importing yarn or cotton for the backward linkage industry of the RMG sector.

In response to the demand for keeping the sub contracting factories out of the purview of VAT, the NBR Chairman said they would consider the matter for building up the sustainable capacity of the RMG sector.