Bowing down to pressure from apparel exporters in Bangladesh, the government has asked the National Board of Revenue (NBR) to lower the tax on apparel and textile exports from the existing 0.8 per cent to 0.3 per cent. Garment manufacturers and exporters from the country will enjoy the benefit of the tax reduction till June 2015. The lowering of the tax would cost the NBR about Tk 10 billion in revenue.

Last month, the Bangladesh finance minister had announced the decision to lower the tax rate on apparel exports from 0.8 per cent to 0.65 per cent. However, readymade garment manufacturers and exporters were disappointed with the rate and appealed to the government to lower it further to 0.25 per cent.

During the first five months of the current fiscal, exports of readymade garments from Bangladesh increased by 20.73 per cent. However, the country’s apparel sector has been facing severe issues in recent months due to the political unrest and garment manufacturers of the country have stated that business had slowed down significantly due to severe disruptions in transportations.