Tuesday, June 18, 2024
HomeNews & ViewsBusiness FocusBudget FY25: Garment and Textile Industries to Retain 0.5% Source Tax for 5 Years

Budget FY25: Garment and Textile Industries to Retain 0.5% Source Tax for 5 Years

The associations of Bangladesh’s garment and textile industries urged the government to provide business-friendly policy support, specifically a reduction in source and corporate taxes, in the proposed budget for the 2024-25 fiscal year, stating that failing to do so would negatively impact these sectors.

gmea btma bkmea budgert25 1

This demand was made at a press conference jointly organized by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and the Bangladesh Textile Mills Association (BTMA) at the BGMEA conference room on June 8.

BGMEA President S. M. Mannan (Kochi) read out a written statement at the press briefing on behalf of the trade organizations. In the statement, concerns were expressed over the budget proposal to increase the source tax from 0.5% to 1.00% for the garment and textile industries. “We hope that the prime minister and the finance minister will consider keeping the source tax for the garment industry at 0.5%,” BGMEA Acting President S. M. Mannan (Kochi) said in the statement. BKMEA Executive President Mohammad Hatem and BTMA President Mohammad Ali Khokon were also present at the press conference. He requested the government to continue the existing 0.5% source tax for the next five years to help the industry create more employment after overcoming the current crisis.

During the press briefing on the proposed budget for FY 2024-25, the BGMEA, BKMEA, and BTMA highlighted several proposals that they welcomed as beneficial for the textile and apparel industry, including:

  • The required deposit for VAT appeals has been reduced from 20% to 10% of the claimed amount.
  • A subsidized import facility for 17 different textile products.
  • The total tax on the import of chillers with a capacity of 50 tons or more for industrial plants has been reduced from 104.68% to 10%. The industry requests approval for imports at a 1% subsidized rate.
  • A special allocation of Tk 100 crore has been made to encourage renewable energy.
  • The import duty on two raw materials used in the production of Polyester Fiber (PSF) and Pet Chips (Textile Grade) has been reduced from 10% and 25% to 1%.

However, the associations also expressed concerns about several budget proposals that they believe will hinder investment and job creation, including:

  • An increase in import duty from 5% to 10% on various types of construction materials used in building steel structures.
  • Fixation of 0% to 1% import duty on capital parts and construction materials for establishments located in economic zones.
  • An increase in VAT on energy-efficient lamps from 5% to 15%.
  • An increase in the new bond license fee from Rs. 50,000/- to Rs. 100,000/- and the license renewal fee from Rs. 5,000/- to Rs. 10,000/-.

Finance Minister Abul Hassan Mahmood Ali on Thursday unveiled the Tk 7.97 lakh crore proposed national budget for the fiscal year 2024-25 with an eye towards battling inflation. The association leaders deemed the proposed budget for FY 2024-25 logical and realistic in light of the global economic recession. “This budget is logical and realistic. It can be implemented through the joint efforts of government and private institutions. The government has prioritized national interest in the budget.”

Leaders of the country’s textile and apparel sectors also expressed concern over the central bank’s recent directive not to provide gas and electricity connections to new factories outside the government-designated economic zones (EZs) and industrial areas. They urged the prime minister to ensure uninterrupted power and gas supply to their factories.

The Bangladesh Textile Mills Association (BTMA) demanded the removal of the 7.5% VAT levied on scrap RMG fabrics (jhut) and the 15% VAT on fibers made using such scraps from the budget for FY25. The BTMA president highlighted issues the textile and clothing industry faces, including the dollar crisis, inadequate energy supply, and the interest rate hike.

BKMEA Executive President Mohammad Hatem urged the government to provide a special incentive package for small garment factories in the proposed budget.

Weekly Newsletter

Get hand picked industry updates delivered straight to your inbox

- Advertisement - spot_img

Join Our Weekly Newsletter

Get hand picked industry updates delivered straight to your inbox
Sign Me Up
- Industry Associate - spot_img

Upcoming Events

Simillar News

Recent Random

Bangladesh RMG exports to USA decline by 14% in Jan-Apr 2024 amidst growing challenges

Bangladesh's ready-made garment (RMG) industry experiencing exports a notable decline to the United States. According to recent trade data, Bangladesh's RMG exports to the...

U.S. Cotton Trust Protocol Announces Expanded Board of Directors

Expanded Board of Directors includes 11 new appointments, bolstering equal representation from across the global cotton supply chain The U.S. Cotton Trust Protocol has today...

Fourstar has a complete and scientific quality management system

Guangzhou International Textile, Clothing and Printing Industry Expo (ITCPE) has become a professional exhibition with wide influence, high popularity and good effect. Focusing on...
Get hand picked industry updates delivered straight to your inbox
Sign Me Up

Weekly Newsletter

Get hand picked industry updates delivered straight to your inbox