The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has appealed to eliminate the 10 per cent tax imposed on cash assistance allocated for the export of readymade garments in the forthcoming National Budget.
The BGMEA argues that since cash assistance is not categorised as business income, it is justified to exempt it from taxation. The garment makers’ body advocated for creating a conducive business environment while also enabling cost reduction.
In order to promote a favourable business environment and alleviate the overall cost of doing business, the BGMEA has put forth several recommendations, including ensuring uninterrupted electricity and gas supply, reducing value-added tax (VAT) and tax rates, maintaining single-digit bank interest rates, and extending incentives for export earnings.
The BGMEA believes implementing these measures will contribute towards enhancing the business landscape and make it more conducive for economic growth.
BGMEA also urged to reduce Tax at Source and Corporate Tax Rates for Garment Exports.
It called for reducing the tax at source for exports from current 1 per cent to 0.50 per cent while also sustaining this rate over the course of the next five years.
Additionally, they have proposed a corporate tax rate of 12 per cent for the garment industry, excluding specific types of income such as gain on Assets Disposal, Sub-contract Income, and miscellaneous expenses, when evaluating the sector.
As to subcontracting in the garment sector, the BGMEA has suggested implementing tax at source based on the proposed procedures during subcontractor payments.
