Manufacturers in Bangladesh want the source tax against readymade garment exports to be withdrawn. Garment exporters now pay tax at source at 0.7 per cent. There is a proposal to raise this to one per cent, which means they have to pay 0.3 per cent higher than what they are currently paying.
They also want an extra five per cent incentive for registered factories and the adoption of a stable revenue policy to encourage investors.
The five per cent incentive is to help readymade garment manufacturers be more competitive enter new markets. They say the production cost has increased by 18 per cent due to various reasons including devaluation of the euro, Britain’s exit from the European Union, the gas crisis etc.
The 28 billion dollar readymade garment sector in Bangladesh contributes to around 80 per cent of Bangladesh’s total exports and creates job opportunities for 4.4 million people. To protect the sector exporters say the corporate tax should be cut to ten per cent from the existing 20 per cent for five years starting from the next fiscal year. The proposal is to cut the corporate tax from 20 per cent to 15 per cent (14 per cent for eco-friendly factories).