Dhaka, Bangladesh (BBN)-Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Md. Siddiqur Rahman thanked the government for keeping some industry-friendly provisions in the budget proposal like tax-free import of pre-fabricated materials and capital machinery.
But at a media briefing in Dhaka, he expressed surprise on the budget proposal of increasing source tax from 0.6 per cent to 1.5 per cent for the RMG industry, reports the fibre2fashion.
Rahman urged the government to keep the source tax like that of the 2014-15 fiscal which was 0.3 per cent and keep the corporate tax for garment industry at 10 per cent as it was.
“The government envisions to secure 8 per cent GDP growth to earn the middle-income country status which will be only be possible if the readymade garment industry grow because its contribution to national GDP is about 13 per cent”, he added.
BGMEA also requested the government to earmark at least BDT 5000 crore as incentives for the RMG industry for ensuring its smooth growth.
Earlier on Thursday, Finance Minister Abdul Muhith in his budget speech proposed to reduce corporate tax to 20 per cent from the existing 35 per cent for the country's export-oriented readymade garment industry.
Muhith acknowledged that the RMG sector is one of the main exporting sectors of Bangladesh.
This sector is making important contribution to the GDP growth and employment generation.
He said during July-April of current fiscal year, Bangladesh's garment export earnings stood at $27.6 billion compared to $25.3 billion during the same period of the last fiscal year.
Muhith said the government is providing “substantial tax benefits” to the apparel sector acknowledging its contribution to the economy.
BBN/SK/AD