Continue 0.5pc source tax for 5yrs
Garment exporters yesterday demanded the continuation of the existing 0.5 % source tax for another five years.
Apparel manufacturers usually demand for supply tax to come to be reduced to 0.25 % both before and following the spending plan is announced every year.
But this year they came up with the phone to keep the taxes the same for quite a while as Finance Minister AHM Mustafa Kamal in his spending plan speech on June 3 didn't clearly mention any rate of source tax.
"The changes in source taxes would hamper the business plan," explained Faruque Hassan, president of the Bangladesh Garment Producers and Exporters Association (BGMEA).
"As a result, we demanded the continuation of the prevailing rate of 0.5 % source tax as the same source tax is way better for long-term business planning," he added.
Hassan was speaking at a press conference at the BGMEA's office found in Uttara, Dhaka to express the association's budget response. The BGMEA chief as well demanded 10 % funds incentive on export receipts of garments created from non-cotton fibre.
Globally, the style industry possesses been shifting to manmade fibre thanks to their environment-friendliness, functionality and durability.
However, Bangladesh continues to be extremely weak in the trade of manmade fibre and clothing items while competing countries have already been making strides in this regard.
Manmade fibre garments occupies 78 % of the global organization while cotton fibre holds the rest of the 22 per cent.
However, some 74.14 % of Bangladesh's garment export earnings come from cotton made items.
Therefore, Bangladesh is lagging in back of in the mainstream organization of manmade fibre garments, which is worth a few hundred billion dollars globally.
New investments should come and lots of jobs will be created if the government gives 10 % cash incentive about export receipts of manmade garment items, Hassan said.
The manmade fibre garment manufacturers may also be able to create new job opportunities and bring back the workers who dropped their jobs because of the extreme fallouts of the Covid-19 pandemic, he added.
Hassan welcomed the proposed budget for continuing different services for the garment exporters and cutting the organization tax and value-added tax.
He as well said the garment sector has recently reemployed the employees who became jobless after the Covid-19 outbreak.
However, he cannot exactly say just how many personnel have lost their jobs and how many had been re-employed with the checking of the market and global source chain immediately after a pause for lockdowns.
By October and November this season, the sector will witness a full recovery of business, the BGMEA chief said.
Nevertheless, Hassan urged the federal government to take methods to eliminate bureaucratic tangles for the ease of doing business.
Currently, Bangladesh is the global leader in green garment factories and the country's production system provides improved to an excellent extent since the Rana Plaza disaster in 2013, he said.
Of the 100 global Leadership in Strength and Environment Design (LEED) certified garment factories, about 39 are in Bangladesh.
Bangladesh offers 143 LEED certified properties and 40 of these are platinum rated factories.
Ten years in the past, how much apparel shipments to different markets stood at $700 million, that was 6.88 per cent of Bangladesh's total outfits shipments per year.
Nowadays the rate has risen to 17 % to over $6 billion a year.
So, it really is indicating that the government's four % stimulus for the new markets worked well.
During the 2008-09 fiscal year, the federal government gave four per cent incentives upon export to new market segments. Bangladesh considers all of the markets as brand-new ones except the EU, US and Canada.
Hassan also said the EU should extend its generalised system of tastes (GSP) to Bangladesh for a lot more than 10 years.
After a decade, the EU should grant Bangladesh the GSP plus as the south Asian economy was hit hard by the pandemic, he added.
