Three top trade bodies of the country have observed that the proposed tax raise at source on exports will hamper the flow of production in the garment sector.
BGMEA President Atiqul Islam made the observation in reaction to the budget that Finance Minister AMA Muhith placed in parliament on Thursday.
In a press conference, the BGMEA chief gave his reaction on behalf of BGMEA, BKMEA and BPGMEA.
He also recommended continuing the existing 0.30% tax at source on export.
"If the government keeps 0.30% tax at source on export, the RMG sector will be able to contribute more to the economy," he said.
The BGMEA chief said: "It will also help the country raise its status to a middle-income nation."
The government has proposed raising the tax at source on exports, including that of the garment sector, to 1% for fiscal year 2015-16.
In the last budget, the government slashed tax at source to 0.30% from 0.80% to give a cushion in the losses caused by political unrest and RMG factory compliance issue.
While placing the budget proposal for the 2015-16 fiscal year, Muhith said this tax deduction at source will be treated as the final tax liability for all export sectors.