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BGMEA demands reduction in source tax on export incentives

  

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has demanded reduction in the source tax on cash incentive against export earnings to support the readymade garment sector in maintaining export competitiveness amid the coronavirus outbreak.

Rubana Huq, President, BGMEA, has demanded that the National Board of Revenue should reduce the source tax, also known as tax deduction at source, on cash incentive to 5 per cent from the existing 10 per cent to facilitate the sector which is suffering from the negative impacts of the outbreak.

According to her, receipt of export payments from many shipments had become uncertain for exporters as many international buyers from the United States, China, the United Kingdom and other European countries had been declaring themselves bankrupt since the outbreak began in China.

The impact of the outbreak has been devastating on the country’s RMG sector and consequently many apparel factories have been shut down, she said.

International buyers have become worried amid the fear of a second wave of the infection, deteriorating the situation further, she added.

According to the BGMEA, foreign buyers have stopped payment of already exported products along with a slowing down in orders.

Exporters are also facing problems in releasing money in cash incentives from the Bangladesh Bank due to not receiving export payments from foreign buyers, it said.

RMG exporters are also facing a liquidity crisis and other problems amid the situation. Under the circumstances, it will be difficult for the exporters to maintain competitiveness on the global market if tax is deducted at the rate of 10 per cent on cash incentive, Rubana said.

 
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