Even as the recent hike in workers’ wages came in as challenge to garment exporters, they have a point to rejoice as well after Bangladesh Government decided to slash tax at source to 0.25 per cent from the existing 0.60 per cent in an effort to offset the challenges posed by the wage hike and give some respite to the apparel exporters.
From now on, exporters will reportedly have to pay Taka 0.25 instead of Taka 0.60 as tax at source for exporting goods worth Taka 100.
The new measure is effective from January 1, 2019. Following the issuance of statutory regulatory order (SRO) under clause 44(4) of the Income Tax Ordinance 1985, the new rate will be applicable for all the export items, excluding jute goods.
“Although we’re apprehending a significant fall in the revenue collection from this sector, we have reduced the rate as the garment owners demanded so to raise the wages of their workers. The Government is always sincere about workers’ welfare,” reportedly maintained a NBR official to the media on condition of anonymity adding that the new rate will improve the compatibility of Bangladeshi products in the global market.
It may be mentioned here that for fiscal year 2018-19, the Government has reportedly set a revenue target (tax and non-tax revenue) at Taka 339,280 crore. Of the total amount, the NBR has been tasked to source Taka 296,201 crore.