Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed satisfaction with the government’s decision to keep the source tax on exports and corporate tax rates unchanged for the upcoming fiscal year 2025-26.
The budget, announced today by Finance Adviser Dr. Salehuddin Ahmed, emphasizes building a non-discriminatory and sustainable economic system amid Bangladesh’s changing political and economic landscape, including post-coup reforms and the country’s impending graduation from Least Developed Country (LDC) status.
Anwar Hossain, BGMEA Administrator, conveyed the organization’s official reaction, noting that although recent elections have been held, a new committee has yet to assume office, with a government-appointed representative currently managing the association. Hossain congratulated Dr. Salehuddin Ahmed on the forward-looking budget, praising its comprehensive approach that prioritizes education, healthcare, governance, and job creation. He also highlighted the budget’s focus on the Fourth Industrial Revolution (4IR) and Bangladesh’s LDC graduation by 2026 as “unique aspects” of the proposal.
The garment sector, which contributes approximately 84% of Bangladesh’s exports, faces numerous challenges both domestically and internationally, including U.S.-imposed counter-tariffs, the cancellation of Indian transshipment facilities, rising bank interest rates, wage hikes, and increasing energy costs. With the country set to graduate from LDC status next year, the industry is bracing for significant post-graduation hurdles.
In response, BGMEA had submitted several proposals aimed at maintaining the industry’s global competitiveness. The government’s budget reflects some of these demands by maintaining key tax rates and introducing reforms to simplify import-export procedures. Notable measures include expedited ownership change applications, extended renewal periods for general bonds, relaxed conditions for raw material imports on a revolving basis, and increased customs duty exemptions for small consignments.
Additionally, penalties for declaration errors have been revised, and advance rulings on HS codes will now be valid for up to 36 months. Customs authorities will also have delegated powers to facilitate smoother operations.
However, BGMEA expressed disappointment that certain critical proposals were not incorporated into the budget. These include duty-free import of machinery and materials for modernization, VAT exemptions for sector-specific products and services, simplification of HS code systems, easing sub-contracting rules, and promoting circular fashion through duty and VAT exemptions for recycling-related activities.
The association emphasized the sector’s vital socio-economic role, supporting the livelihoods of over 10 million people directly and around 50 million indirectly. “The entire economy revolves around this industry,” the statement read. “It is essential for the government to provide focused support and address the outstanding issues to ensure the industry’s resilience and growth in the coming years.”
