Bangladesh’s accessories and packaging industry wants the source tax and the corporate tax to be reduced. The industry says such a tax will hamper regular export activities, lower competitiveness, and discourage investment which would also result in lower employment.
The national Budget for the upcoming fiscal has proposed a 1.5 per cent source tax for export-oriented sectors including the accessories and the packaging industry. But the industry wants the existing 0.60 per cent source tax for the sector to be retained.
Some 1,500 units in Bangladesh produce 30 to 35 types of accessories including poly bags, buttons, zippers, hangers and elastic. These units meet nearly 90 per cent of the demand of export-oriented sectors including readymade garment, leather and footwear, ceramic, frozen fish and pharmaceutical. They help readymade garment makers produce apparel products at a competitive price and meet their short lead times. Some 20 per cent of the accessories are exported worldwide. Accessory makers want cash incentives to explore new markets and boost direct exports.
The readymade garment industry in Bangladesh has got a cut in corporate tax. As a backward linkage industry of the garment sector, the accessories and packaging industry wants a similar cut.