Bangladesh has given more tax waiver to encourage garment exports. Value added tax or VAT has been waived in transportation, IT services, security services, laboratory tests etc for the export oriented clothing industries. Payment of VAT on water, electricity and gas bill has also been made easier. This is expected to reduce the cost of manufacturing garments and increase export earnings and competitiveness.

Earlier garment factory owners paid five per cent VAT on the transport of goods from port to factory. Now, no VAT will be paid for transport charges. Similarly the 15 per cent VAT on employing security guards has been completely lifted. No VAT needs to be paid for chemical tests of clothing products or laboratory tests. For this examination, owners of garment units had to pay VAT at 15 per cent.

At present, garment factories have a VAT waiver facility of up to 60 per cent for the bill of services like gas, electricity, water etc. But they had to face many complications to get this facility and refunds were done through a department. Now exporters will get this facility directly. In September, the rate of source tax in the readymade garment sector was reduced by one per cent. At the same time, the corporate tax of this sector was reduced from 15 per cent to 12 per cent and for the green industries the corporate tax was fixed at 12 per cent.