As sourcing professionals, cost competitiveness goes beyond just FOB prices—it’s about the total cost to serve, and corporate tax plays a critical role in that equation.
In the world of Ready-Made Garments (RMG), we often focus on FOB, capacity, and compliance. But corporate tax? That’s where many silent advantages begin to emerge.
Summary Table:
Country Corporate Tax Rate for RMG Exporters
Bangladesh 15% (14% for green-certified factories)
Cambodia 0% (QIP-approved exporters)
Myanmar 0% for first 5 years in SEZs; then 50% for next 5 years
Vietnam 10%–20% (depending on project type and incentives)
India 15% (new manufacturing companies); 25% standard
China 15% (high-tech enterprises); 25% standard
Sri Lanka 14% (BOI-approved entities); 24% standard
Pakistan 29% standard; reduced rates for exporters under review
What’s the Sourcing Takeaway?
While Bangladesh remains competitive with a 10%–12% tax rate, especially for green-compliant factories, other sourcing hubs are offering more aggressive tax incentives—and it’s starting to shift the landscape:
✅ Cambodia’s 0% tax for QIP-approved exporters is a strategic advantage
✅ Vietnam and Myanmar are quietly gaining ground with smarter tax structures
✅ India and China SEZs offer targeted, zone-based incentives to attract investment
How Can Bangladesh Stay Ahead?
To maintain its position as a leading sourcing destination, Bangladesh should:
- Expand the 10% tax benefit to include all export-oriented, compliant factories—not just green ones.
- Simplify approvals and audits to improve investor confidence and ease of doing business.
- Introduce innovation-linked tax rebates to promote automation, sustainability, and digital transformation.
- Adopt zone-based taxation models, inspired by SEZs in Vietnam and India.
Author: Abdullah Al Mamun, Business Area Manager, M&S Bangladesh
