Kazi Zahidul Hasan :
More products should be included in the list of items that enjoy export incentives with a view to boosting outbound shipments, said the Exporters Association of Bangladesh (EAB).
Commenting on the issue, EAB President Abdus Salam Murshedy on Thursday said that currently only few items avail export subsidy under the government’s scheme.
“The list requires immediate expansion of as many as potential export sectors that are deprived of getting the incentive. This timely initiative would help boost the country’s export and explore new markets,” he said.
Abdus Salam Murshedy, who is also a ruling party lawmaker, mentioned that local exporters are struggling to sustain production and maintain edge of exportable in global market due to high cost of production caused by rise in wages and utility bills, compliance cost, and declining international market price.
“We have been demanding extension of the list of incentive eligible products to help offset high cost of production.”
Currently, 26 sectors are provided with cash incentives ranging from 2 per cent to 20 per cent of their export proceeds to encourage higher shipments.
Like every year, the government allocated Tk 4,500 crore for cash incentive purpose in the current budget.
Of the amount, Tk 500 crore went to the jute sector and the other Tk 4,000 crore was allocated for all sectors, including textile and garments, according to Finance Ministry statistics.
But now garment exporters, who fetch more than 80 per cent of the country’s export receipts, are demanding 5 per cent cash incentives for all export shipments for the next five years to tide them through the rising costs amid implementation of the new wage board in the industry.
At present, garment makers that use local yarn enjoy subsidy of 4 per cent on their export earnings.
Those who export to new markets — which are destinations other than the US and the EU — also get cash subsidy.
“Over 80 per cent of our export earnings come from the apparel sector. But manufacturers are losing their competitive edge due to a rise in production costs. We need additional government support to offset production cost,” cited Abdus Salam Murshedy.
He demanded an extra Tk 5 in exchange rate of US dollar for garment export receipts as it may boost shipments by 6 per cent.
He also called for keeping all kinds of purchases for export purposes out of the purview of VAT, corporate tax cuts for garment companies from 12 per cent to 10 per cent and duty-free import of all kinds of safety equipment.
The EAB chief urged the government to carry forward the source tax of 0.25 per cent on export receipts in the next budget.
If the government reduces the corporate tax and brings down tax-at-source to the previous level to increase competitiveness, Bangladesh will be able to boost its export.
He urged the government to simplify the process for getting cash incentives. “Exporters have to face a lot of difficulties in receiving the incentive money,” he said.
When asked, Abdus Salam Murshedy said that the ongoing trade war between the US and China has created an opportunity for Bangladesh’s garment sector. If the opportunity is to be utilised, the exporters need a helping hand from the government.
More products should be included in the list of items that enjoy export incentives with a view to boosting outbound shipments, said the Exporters Association of Bangladesh (EAB).
Commenting on the issue, EAB President Abdus Salam Murshedy on Thursday said that currently only few items avail export subsidy under the government’s scheme.
“The list requires immediate expansion of as many as potential export sectors that are deprived of getting the incentive. This timely initiative would help boost the country’s export and explore new markets,” he said.
Abdus Salam Murshedy, who is also a ruling party lawmaker, mentioned that local exporters are struggling to sustain production and maintain edge of exportable in global market due to high cost of production caused by rise in wages and utility bills, compliance cost, and declining international market price.
“We have been demanding extension of the list of incentive eligible products to help offset high cost of production.”
Currently, 26 sectors are provided with cash incentives ranging from 2 per cent to 20 per cent of their export proceeds to encourage higher shipments.
Like every year, the government allocated Tk 4,500 crore for cash incentive purpose in the current budget.
Of the amount, Tk 500 crore went to the jute sector and the other Tk 4,000 crore was allocated for all sectors, including textile and garments, according to Finance Ministry statistics.
But now garment exporters, who fetch more than 80 per cent of the country’s export receipts, are demanding 5 per cent cash incentives for all export shipments for the next five years to tide them through the rising costs amid implementation of the new wage board in the industry.
At present, garment makers that use local yarn enjoy subsidy of 4 per cent on their export earnings.
Those who export to new markets — which are destinations other than the US and the EU — also get cash subsidy.
“Over 80 per cent of our export earnings come from the apparel sector. But manufacturers are losing their competitive edge due to a rise in production costs. We need additional government support to offset production cost,” cited Abdus Salam Murshedy.
He demanded an extra Tk 5 in exchange rate of US dollar for garment export receipts as it may boost shipments by 6 per cent.
He also called for keeping all kinds of purchases for export purposes out of the purview of VAT, corporate tax cuts for garment companies from 12 per cent to 10 per cent and duty-free import of all kinds of safety equipment.
The EAB chief urged the government to carry forward the source tax of 0.25 per cent on export receipts in the next budget.
If the government reduces the corporate tax and brings down tax-at-source to the previous level to increase competitiveness, Bangladesh will be able to boost its export.
He urged the government to simplify the process for getting cash incentives. “Exporters have to face a lot of difficulties in receiving the incentive money,” he said.
When asked, Abdus Salam Murshedy said that the ongoing trade war between the US and China has created an opportunity for Bangladesh’s garment sector. If the opportunity is to be utilised, the exporters need a helping hand from the government.
