For the 2017-18 fiscal year the government reduced the corporate tax for the sector to 15 per cent from the exiting 20 per cent in the proposed budget toease the growth of the readymade garments (RMG) sector as well as ease of doing business.
While placing the budget finance minister AMA Muhith pointed out saying that apparel sector has been enjoying various incentives and tax benefits and looking at the RMG sector’s contribution to economic growth and employment generation, he would reduce the corporate tax rate to 15 per cent for RMG sector. The reason being it was under manifold pressure due to adversities in the international market and claimed cash incentives along with withdrawal of withholding tax, he added. He ensures both sustainable development as well as conservation of our environment the government has undertaken various initiatives for preventing environment pollution and maintaining ecological balance. He also believes export to the US market will increase with accelerated economic recovery in US.
Talking to The Independent, research fellow of Centre for Policy Dialogue (CPD) Towfiqul Islam Khan says the tax rate will definitely facilitate the RMG sector to accelerate exports to the international market and thus there will be a boost in the local economy.
In regards to green factories in textile and RMG production Khan revealed that 67 LEED-certified factories were operating in Bangladesh, and among these, 13 have received platinum status, 20 gold status, and 34 silver status. 220 factories were waiting in the pipeline to get the LEED certification and hence according to him this 14 per cent tax rate will certainly encourage more factories to get green building certificates in future.
Compared to last year till March of the current fiscal year, growth of import payments stood at 11.07 per cent. Aiming to promote the growth of domestic heavy industries, the minister proposed to continue with VAT exemption for some items for a few years more.
The industries that will get the benefit are local manufacturers of refrigerators and freezers, air-conditioners, domestic producers and suppliers of palm oil and LPG cylinder manufacturers.
