The apex garment makers’ bodies in Bangladesh, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have sought continuance of reduced rate of source tax (0.25 per cent) for a period of 5 years.
This they demanded considering the fallout of COVID-19 outbreak and how to keep Bangladesh’s apparel items competitive in the global market.
The BKMEA and the BGMEA in their budgetary proposals to the Government also demanded continuation of reduced 10 per cent and 12 per cent (green factories) corporate tax for the next 5 years.
The BKMEA further also sought 10 per cent cash incentive on export receipts for next 2 years in its budget proposal submitted to the National Board of Revenue (NBR).
The knitwear manufacturers’ body demanded 4 per cent cash incentive for apparel items made from imported raw materials while suggested that garment makers who use raw materials sourced locally for their offerings be made eligible for 10 per cent incentive.
As per the Vice President of BKMEA, Mohammad Hatem, considering the probable impact of coronavirus, which he feels could force many small and medium enterprises out of business, the Government needs to also hammer out an exit plan for such businesses in the upcoming budget.
The BGMEA in its 12-point proposal for the next budget underlined that the country’s apparel export had witnessed a negative growth rate of 6.21 per cent in the July-December period of the financial year 2019-20, whereas its competitors like Pakistan and Vietnam in the same period grew, respectively, by 5.25 per cent and 5.85 per cent.
Keeping this into consideration as well as to keep Bangladesh’s competitive edge in the global market intact in face of rising cost of doing business in the country, the BGMEA highlighted various focus areas in its proposal to bring Bangladesh’s apparel exports back on track again.