Exporters in Bangladesh have expressed worry about the proposed hike in tax at source and the proposal to raise the corporate tax for the apparel sector in the new national budget. They say the budget has no special monetary policy guidelines for the garment sector and no guidelines for investment or encouraging investment.
They fear the proposed hike in tax at source for the export-oriented industry will affect the sector negatively and comes at a time when the country’s top foreign currency earning sector has been facing tough times. The plan is to increase to 1.50 per cent the tax at source from the existing 0.60 per cent on all types of export of apparel for the coming financial year.
Apparel makers are now paying 0.60 per cent tax at source in the outgoing fiscal. Exporters say the proposal must be reconsidered and the main foreign currency earning industry should be helped to maintain growth. The garment industry in Bangladesh accounts for about 80 per cent of the country’s total export earnings. The budget also proposes a 20 per cent corporate tax for the garment sector. Exporters want this to be reduced to 10 per cent in the coming fiscal.