Bangladesh’s garment exporters want relief from tax at least for the next two fiscals. They say the industry has experienced a gradual drop in export growth in the past few years and describe the current market situation as critical. The withdrawal of the tax at source on garment products would help the sector stay in the world market.

Exporters say taxes are already paid on yarn, cloth, accessories, washing and end products and so taxes are paid on the same product repeatedly.

The average growth of export in the readymade garment sector was 13 per cent in the past ten years, but has dropped to 2.21 per cent in the current fiscal.

Blame for this is assigned to unsuccessful bids to enter new markets, the crisis of gas and power supply, and the high rates of interest on bank loans.

Following demands by businesses, the proposed tax at source on all products, including readymade garments, was 1.5 per cent for the 2016-17 fiscal year but was later cut to 0.7 per cent.

The 28 billion dollar readymade garment sector contributes to around 80 per cent of Bangladesh’s total exports but exports from this sector have dropped by 6.8 per cent to the US and 5.91 per cent to the EU countries.