Bangladesh Finance Minister AHM Mustafa Kamal on 3 June unveiled before the parliament the proposed budget for FY 22, in which reports claim there has been no decline in terms of tax at sources of export earnings, existing taxes on exporters or the corporate tax rate on export organisations while adding the proposed budget did not reflect many of the key demands put forth by the exporters, which also include renewed incentives for garments made of specialised man-made fabrics.
However, exporters are hopeful their demands will be taken into account before the budget is passed.
Meanwhile, speaking to the media, Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md. Shahidullah Azim, reportedly, maintained, “The tax at the source of apparel export earnings will be reduced from the existing 0.5 per cent to 0.25 per cent,” even as he, reportedly, added that in addition, a 10 per cent cash assistance will be provided for the export of garment products made of man-made fibre (MMF) to encourage product diversification.
It may be mentioned here that the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the BGMEA have proposed decreasing source taxes to 0.25 per cent in FY22 even as the textile sector proposed a decrease in the existing VAT on MMF from Taka 6 per kilogramme to Taka 3 like other cotton yarns, which was not reflected in the budget.