The readymade garment manufacturing sector of Bangladesh, including the apex trade bodies, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Exporters Association of Bangladesh (EAB) and the Bangladesh Textile Mills Association (BTMA), have called upon the Government to provide 4 per cent cash incentive to exporters of knitwear against their repatriation of export proceeds.
They requested the authorities to ensure the same instead of the existing value addition criteria.
In a joint letter sent to the Finance Ministry on Sunday, which was signed by the heads of the respective trade bodies – President of BKMEA AKM Salim Osman; Dr. Rubana Huq, BGMEA President; Abdus Salam Murshedy, President of EAB and BTMA President Mohammad Ali Khokon – the garment makers underlined that they were being harassed owing to the ambiguity in the existing circular in this regard and called upon the authorities to issue a master circular.
The garment makers said that at present the cash incentive is calculated based on 80 per cent of repatriated export proceeds which effectively means that they were getting a maximum incentive of 3.2 per cent only as incentive for apparel sector is calculated on value addition – 80 per cent of proceeds repatriation – while it is not the case with other export sectors and claimed that there was no realistic method of determining the value addition to products while adding calculating incentive on value addition makes the process even more cumbersome.
At present, the knitwear manufacturers are entitled to 4 per cent alternative cash incentive against value addition to their offerings, made in Bangladesh, using local yarn.
Different methodology is used in determining products’ prices based on the variation of design and quality of fabric and this is a very complicated technical issue as charges for knitting and dying are variable, the letter further added.
Earlier in 2017, the country’s trade and tariff commission also conceded the fact that there was no realistic methodology to determine value addition to products and suggested that the Government should pay cash incentive on export proceeds instead of value addition to the knitwear manufacturers.