The Bangladesh Garment Manufacturers and Exporters Association on Friday said that there were no clear directions for the growth of the country’s apparel and textile industry in the proposed budget for the financial year 2023-24.
At a press conference on the proposed national budget placed before the parliament on June 1, BGMEA president Faruque Hassan said that many of the proposals from the trade body were not accommodated in the proposed budget.
‘We did not find any clear-cut directions in the proposed budget for the country’s export-oriented apparel and textile sector,’ the BGMEA president said at the press conference held at Tejgaon in the capital Dhaka.
He said that the BGMEA had demanded setting source tax at the rate of 0.50 per cent in the budget as the sector was struggling to rebound from the Covid fallout and the demand for apparel decreased in the global market due to high inflation caused by the Russia-Ukraine war.
Many readymade garment factories are running with under-capacity as the demand for apparel decreased due to the global economic slowdown and the sign of recovery from the situation is still uncertain, Faruque said.
He apprehended that the withdrawal of cap on interest rate from July 1 would increase the cost of production and Bangladesh RMG sector would lose its competitiveness on the global market.
Considering the declining trend of global demand, Faruque said that the government should reduce the source tax to 0.50 per cent for the next five years and provide cash incentive at the rate of 10 per cent on the exports of non-cotton apparel to promote investment, increase exports and generate employment.
The BGMEA president once again demanded reduction in source tax on income of the exporter retention quota fund to 10 per cent from the existing 20 per cent and withdrawal of 10 per cent tax on cash incentive.
He also urged the government to reconsider corporate tax at the rate of 12 per cent to assess its members’ other incomes, including gain on asset disposal and sub-contractor income, instead of 30 per cent corporate tax rate.
‘We have demanded keeping the recycling process and products out of the purview of all types of taxes as there is a scope for Bangladesh RMG sector for producing export products worth $5 billion a year through recycling post-industrial waste. But the proposal was not reflected in the proposed budget,’ Faruque said.
The BGMEA president urged the government to reconsider the issue.
