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Bangladesh has reduced the source tax on export proceeds

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To boost Garments sector Bangladesh has reduced the source tax on export proceeds for all sectors from 1.0 per cent to 0.25 per cent. The aim is to boost readymade garment exports. The reduced source tax rate will remain till the end of this fiscal year. Bangladesh garment exporters have long been demanding for source tax reduction. The tax reduction decision was made in the wake of sluggish growth in export income in recent months.

Bangladesh’s export earnings in the first quarter of the current fiscal year fell 2.94 per cent year-on-year. Knitwear garment exports declined 1.64 per cent while woven garments fell 0.87 per cent. Bangladesh has put in action a multi-pronged approach to ensure that garment exports to new countries get the much-needed traction in every possible way. It is also working toward increasing apparel exports to South America, Russia and Brazil, among others. Wage payments are being digitized. Workers are paid through their mobile wallets. Additionally, to streamline the production process and keep the future in perspective, entrepreneurs are being encouraged to set up units within planned industrial zones. Europe and USA have long been the export strong holds of Bangladesh.

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