Kamruzzaman Bablu :
Country’s exporters have urged the government to reduce tax burden on the export-oriented industries amid falling exports.
They also demanded fiscal incentive for export sector to ensure that Bangladeshi products remain competitive in the global market.
Leaders of the Exporters Association of Bangladesh (EAB), the apex trade body of the exporters, came up with the demands while placing their budget wish lists to the National Board of Revenue (NBR) at a city hotel on Monday.
The national budget for fiscal year 2017-18 will be placed in the parliament on June 1.
Exporters want tax at source to be slashed to 0.25 per cent from the existing 0.70 per cent in the next budget. The new rates of tax at source should applicable on export-oriented apparel, terry-towel and home textile industries.
They recommended for slashing corporate tax to 10 per cent from 20 per cent for the export-oriented apparel industries, 10 per cent from 15 per cent for terry-towel and home textile industries, 15 per cent from 35 per cent for garment accessories and packaging industries. They also suggested 100 per cent VAT exemption on gas, water and electricity bills of export-oriented industrial units.
“Exporters have been urging the government for some tax relief in the budget reeling under sliding exports due to slow global demand, sharp fall in crude prices, fall in commodity prices and currency fluctuations,” EAB President Abdus Salam Murshedy told The New Nation on Monday.
“Along with tax cut, the government should announce sops for the export-oriented industries amid tepid global demands and shrinking value of local products in the traditional markets. Such initiatives can help make local products more competitive and increase exports,” he added.
Salam Murshedy said, “Bangladesh’s weakening exports reflected sluggish growth in global trade. In addition, a falling value of Euro and other major currencies negatively affected exports by reducing price competitiveness of Bangladeshi products.
According to the Ministry of Commerce, the country witnessed 3.92 per cent growth in exports during the period of July-April of 2016-17 fiscal compared to the corresponding period a year earlier.
Growth in exports was over 9 per cent during the period of July-April of 2015-16 fiscal.
The fall in export growth was blamed for drop in prices of ready-made garments (RMG), which account for over 80 per cent of total export. According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), prices of Bangladeshi garments dropped in the US by 3.81 per cent in 2015 and 1.1 per cent in 2016.
In the European Union, the prices declined by 0.76 per cent in 2015 and 3.19 per cent the following year.
“There is a downtrend in garments export because of the drops in their prices in the US and Europe. Currency rate fluctuations also negatively impacts companies widely exposed to overseas markets,” BGMEA Vice-President Mahmud Hasan Khan Babu told this correspondent yesterday.
Knitwear exports went up by 4.81 percent to $11.25 billion in July-April of the current fiscal while overseas sales for woven garments decreased by 0.14 per cent to $11.88 billion during the period.
“We are worried over the falling growth of RMG export. The current pace of growth is indicating that the country is going to miss its export target for fiscal 2016-17, which is 8 per cent higher than the receipts in 2015-16,” said Babu.
The BGMEA leader urged the government for slashing tax on them saying it is necessary for the sector to stay competitive in the global market. Our production cost went up for the last few years due to hike in gas and power tariff and workers’ wages. So, we need fiscal incentive in the next budget to reduce cost of production and it is vital for making local industries competitive in the global arena.
The EAB also demanded duty-free import of machinery and parts used for setting up, extension and modernization of terry-towel and home textile industries. These industries should also enjoy VAT exemption.
It also demanded for incentive package for export industries, duty-free import of all fire-fighting and security equipments for industrial use.
Other demands are: withdrawal of 4 per cent VAT on packing materials, fuel and lubricant, chemical and detergent, ice purchase and uniform and liveries, 4.5 per cent VAT waiver on carriage inwards and outwards and withdrawal of 15 per cent VAT on fuel and lubricant, repair and maintenance, travelling and conveyance, staff’s food, courier and postage, printing and stationery and survey fees for export-oriented frozen food industries.
According to Export Promotion Bureau (EPB), the country earned US$ 28.72 billion from exports during the period of 2016-17 fiscal against the target of US$ 37 billion.
Bangladesh shipped goods worth $34.26 billion in the last fiscal year and the government is aimed to earn $37 billion in the current fiscal year ending next month.
Country’s exporters have urged the government to reduce tax burden on the export-oriented industries amid falling exports.
They also demanded fiscal incentive for export sector to ensure that Bangladeshi products remain competitive in the global market.
Leaders of the Exporters Association of Bangladesh (EAB), the apex trade body of the exporters, came up with the demands while placing their budget wish lists to the National Board of Revenue (NBR) at a city hotel on Monday.
The national budget for fiscal year 2017-18 will be placed in the parliament on June 1.
Exporters want tax at source to be slashed to 0.25 per cent from the existing 0.70 per cent in the next budget. The new rates of tax at source should applicable on export-oriented apparel, terry-towel and home textile industries.
They recommended for slashing corporate tax to 10 per cent from 20 per cent for the export-oriented apparel industries, 10 per cent from 15 per cent for terry-towel and home textile industries, 15 per cent from 35 per cent for garment accessories and packaging industries. They also suggested 100 per cent VAT exemption on gas, water and electricity bills of export-oriented industrial units.
“Exporters have been urging the government for some tax relief in the budget reeling under sliding exports due to slow global demand, sharp fall in crude prices, fall in commodity prices and currency fluctuations,” EAB President Abdus Salam Murshedy told The New Nation on Monday.
“Along with tax cut, the government should announce sops for the export-oriented industries amid tepid global demands and shrinking value of local products in the traditional markets. Such initiatives can help make local products more competitive and increase exports,” he added.
Salam Murshedy said, “Bangladesh’s weakening exports reflected sluggish growth in global trade. In addition, a falling value of Euro and other major currencies negatively affected exports by reducing price competitiveness of Bangladeshi products.
According to the Ministry of Commerce, the country witnessed 3.92 per cent growth in exports during the period of July-April of 2016-17 fiscal compared to the corresponding period a year earlier.
Growth in exports was over 9 per cent during the period of July-April of 2015-16 fiscal.
The fall in export growth was blamed for drop in prices of ready-made garments (RMG), which account for over 80 per cent of total export. According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), prices of Bangladeshi garments dropped in the US by 3.81 per cent in 2015 and 1.1 per cent in 2016.
In the European Union, the prices declined by 0.76 per cent in 2015 and 3.19 per cent the following year.
“There is a downtrend in garments export because of the drops in their prices in the US and Europe. Currency rate fluctuations also negatively impacts companies widely exposed to overseas markets,” BGMEA Vice-President Mahmud Hasan Khan Babu told this correspondent yesterday.
Knitwear exports went up by 4.81 percent to $11.25 billion in July-April of the current fiscal while overseas sales for woven garments decreased by 0.14 per cent to $11.88 billion during the period.
“We are worried over the falling growth of RMG export. The current pace of growth is indicating that the country is going to miss its export target for fiscal 2016-17, which is 8 per cent higher than the receipts in 2015-16,” said Babu.
The BGMEA leader urged the government for slashing tax on them saying it is necessary for the sector to stay competitive in the global market. Our production cost went up for the last few years due to hike in gas and power tariff and workers’ wages. So, we need fiscal incentive in the next budget to reduce cost of production and it is vital for making local industries competitive in the global arena.
The EAB also demanded duty-free import of machinery and parts used for setting up, extension and modernization of terry-towel and home textile industries. These industries should also enjoy VAT exemption.
It also demanded for incentive package for export industries, duty-free import of all fire-fighting and security equipments for industrial use.
Other demands are: withdrawal of 4 per cent VAT on packing materials, fuel and lubricant, chemical and detergent, ice purchase and uniform and liveries, 4.5 per cent VAT waiver on carriage inwards and outwards and withdrawal of 15 per cent VAT on fuel and lubricant, repair and maintenance, travelling and conveyance, staff’s food, courier and postage, printing and stationery and survey fees for export-oriented frozen food industries.
According to Export Promotion Bureau (EPB), the country earned US$ 28.72 billion from exports during the period of 2016-17 fiscal against the target of US$ 37 billion.
Bangladesh shipped goods worth $34.26 billion in the last fiscal year and the government is aimed to earn $37 billion in the current fiscal year ending next month.
