The proposed budget for FY25 is realistic but needs business-friendly policies for successful implementation, said Al Shahriar Ahmed, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
At a post-budget press conference in the capital on Thursday, Ahmed called for the removal of all newly introduced and increased duties on the export-oriented sector in the proposed FY25 budget. He emphasized that meeting these demands would facilitate the budget’s implementation.
Adzi Trims Managing Director also commented on the budget, acknowledging the finance minister's good policies in his first budget proposal.
However, he expressed concerns about fully supporting the budget, noting that inflation within a manageable range benefits small entrepreneurs by creating jobs and generating government revenue.
Unfortunately, the proposed budget lacks specific guidelines in this area. He criticized the plan to increase regular taxpayers' rates to 30% while offering amnesty to holders of undisclosed and black money with just a 15% tax, calling it illogical.
In his written speech, Ahmed demanded a reduction of the source tax to 0.5% for five years, down from the current 1%, and suggested this should be the final settlement.
He also requested the removal of the proposed 200%-400% penalty for unintentional HS Code mismatches and proposed allowing utilities connections and bank loans for factories outside industrial zones for the next five years.
Mentioning the accessories and packaging sector, directly and indirectly, earned nearly $9 billion annually, and its global market size is around $700 billion, the BGAPMEA president said that they demand cash incentives for the accessories and packaging sector as exporters.
“We demand all goods and services out of duties and VAT for the packaging and accessories sector.”
In reply to a question, former BGAPMEA president Rafez Alam Chowdhury said that the private sector is most important in creating employment and they already know through the BBS survey that over 1 lakh private sector employees have dropped out.
“We directly earned over $1.5 billion through the accessories and packaging sector, which is a drop in the bucket when compared to the $700 billion global market size. This market is dominated by China and Vietnam, though we have enough capacity to grab the market,” he added.
Echoing Rafez Alam, Al Shahriar said that not only the garment sector, they are also manufacturing accessories and packaging for almost all export sectors and they are meeting almost all local demands.
“However, unfortunately, we have yet to get government attention. We will work with the government to grab the opportunity.”
Shahriar urged the government to withdraw the decision to increase VAT to 15% from the existing 5% and issue a Utilization Declaration (UD) facility to smooth raw material import for the accessories and packaging sector.
Former BGAPMEA President Abdul Kader Khan was also present along with the directors and leaders from the apex and sole organization of the country’s accessories and packaging sectors.