Bangladesh apparel industry may face huge losses despite incorporating some initiatives to support businesses if the source tax on export proceeds is doubled as proposed in the fiscal budget for 2022-23, warned RMG exporters in webinar organized by The Business Standard. Exporters argued, a two-fold hike in source tax amidst rising production costs, may add more stress on already ailing businesses. It may compel garment factories to shut down, the exporters added.
The webinar was attended by Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and Fazlul Hoque, Managing Director, Plummy Fashion. It was moderated by Sharier Khan, Executive Editor. The Business Standard
Hoque said, rising product costs may lead to buyers from America and Europe buying fewer products from Bangladesh exporters. It may also lead to future recession, affecting the exporters’ production costs. He urged the government to consider the issues judiciously. Terming the move as a big blow to export trade, Hatem said, the proposal has overshadowed many other good aspects of the budget.
He alleged, Bangladesh taxation system is not conducive to investment and business. That is why exporters are unable to attract foreign investments despite efforts. The two entrepreneurs, however, hailed the continuation of export cash assistance.
They said, although orders for garments products from the main export destinations of the country are declining due to inflation and recession, there is a possibility of orders being diverted from China to Bangladesh in future. Hatem urged the authorities, including the NBR, to be business friendly in capturing these possibilities.