Staff Reporter :
The National Board of Revenue (NBR) on Thursday urged the country’s apparel exporters to increase competitiveness to cope with the upcoming challenges.
NBR Chairman Abu Hena Md Rahmatul Muneem gave the call in a pre-budget discussion with the leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in the conference room of the revenue board.
“RMG industry is considered the special priority sector of the government and it got many special facilities to face Covid-19 for getting more export orders amid the pandemic,” he said.
“We also want development of the sector to resolve the problems. However, if we provide facilities frequently, it might be misused,” said the NBR chairman, adding, “You (RMG producers) will have to increase competitiveness to cope with the upcoming challenges as many tax related facilities will be withdrawn after the country’s LDC graduation.”
In the pre-budget discussion, BGMEA President Faruque Hassan demanded continuation of existing rates of source and corporate taxes at least for the next five years to help the industry cope with the emerging challenges. The existing source tax is 0.50 per cent while the corporate tax is 10 per cent and 12 per cent for green and other garment factories respectively.
The industry is facing a tough time and find it difficult to sustain competitiveness in the global market because of investing a huge amount of money for remediation and retrofitting of factories as prescribed by the brands, he said.
Besides, Bangladesh will face new challenges due to erosion of duty benefits in major markets including the EU, the BGMEA chief said.
According to the budget proposals of the BGMEA, it demanded Value Added Tax (VAT) exemption for the subcontracting factories and withdrawal of the existing 10 per cent advance income tax on cash incentives given by the government against export earnings.
“Many of the factories that don’t have sufficient export orders are subcontracting to meet their operation costs,” he said.
The factories should get VAT waiver facility as they produce 100 per cent exportable goods.
The BGMEA wants relaxation of the provision of mandatory inclusion of harmonised system of codes in bond licence in releasing imported raw materials under the bonded facilities.
The apparel makers were facing delays in releasing raw materials due to the provision of mandatory inclusion of HS codes of imported items with the bond licence and the situation is subsequently causing delays in export shipments, it explained.
The BGMEA proposed to issue a directive allowing the release of raw materials as per the description of buyers’ requirements and HS codes mentioned in the utilisation declarations issued by the BGMEA.
