RMG Accessories makers want equal import availability for tariff, non-tariff establishments in the upcoming budget of the FY25
The accessories and packaging manufacturers of the country demanded equalization of import availability of tariff (Bepza, beza etc) and non-tariff bonded establishments of all areas in the upcoming budget of the financial year 2024-25.
The accessories sector, the backward linkage industry of the readymade garment (RMG) sector, also sought a provision of import availability for a period of three years.
Md Al Shahriar, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), the apex trade body of accessories and packaging manufacturers, presented these demands in their proposals for the upcoming budget of FY25.
He said there is no restriction on the import availability of bonded establishments located in the tariff area but a limit on the non-tariff area. Moreover, after submitting all the required documents, the audit is not completed on time.
When the goods reach the port, they must be cleared by providing a bank guarantee. It is difficult for businesses that purchase raw materials from the local market to continue exporting and producing, leading to a hike in production costs.
Due to this, unequal competition is created between bonded institutions in tariff and non-tariff areas. So, equalizing import availability for all bonded companies is a must to prevent unequal competition between bonded companies in tariff and non-tariff areas.
The BGAPMEA also said that 15%-18% of the marginal product of the apparel industry is attached to accessory products and the price of accessories also affects the marginal product price.
Currently, the accessories sector meets almost 100% of the demand of the country’s major export-oriented apparel sector. Moreover, accessories and packaging products are being directly exported abroad.
To maintain the capacity of the RMG sector, it is necessary to reduce the production cost of the products of this sector.
In this situation, like the other four trade associations, it is necessary to provide continuous bond facilities in favour of the member industries of BGAPMEA, which are 100% export-oriented, in the interest of both the garment sector and the accessories and packaging sector.
They also urged to exclude all sorts of local purchases of export-oriented industries from the ambit of existing 15% VAT. Regarding source tax, the BGAPMEA demanded to reduce tax at source to 0,25% from the existing 1% on all exports for the next 5 years.
To encourage exports, the Income Tax Act has reduced from time to time 1% income tax at source against all exports and levied at 0.25%. Income tax at the said source was raised again to 1% in the previous financial year.
They also demanded to reduce tax at source on bank interest income to 10% from the existing 20% to give exporters some ease.
The association also demanded to raise the tax-free income ceiling to Tk4 lakh from the existing Tk3.5 lakh to generate more revenue.
BGAPMEA urged to ban the import of finished products of garment accessories and packaging under the bond in order to sustain the domestic industry and to keep the direct export sector competitive in the international market.
