Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has decided to cancel the membership of the factories, which will fail to submit renewed trade licenses and updated tax returns by the year end.
The decision was made at a board meeting held Saturday night, with the association president M Atiqul Islam in the chair.
“We have taken an epoch making decision for the non-compliant members of BGMEA. We want to make readymade garment industry a matured and compliant one,” Atiqul Islam told Dhaka tribune yesterday.
According a commerce ministry circular published on January 12, 2010, a businessman must have a TIN, updated tax return documents and trade license to be a member of any business association of their respective area and business.
The membership of any association will be cancelled, If any member of any association, excluding federation chamber, fails to place his or her updated tax return documents and trade license within the stipulated time.
BGMEA has 3,290 members in accordance with last year’s updated membership while around 2,300 factory owners take Utilisation Declaration (UD). On the other hand, about 3,600 factories out of 5,000 factories are active across the country.
The move came following demands from the Accord, International Labour Organisation (ILO), Bangladesh University of Engineering and Technology, Alliance and National Action Plan, for the betterment of inspection programme as the inspection teams did not find many companies as per their addresses mentioned in the BGMEA directory.
There are some factories which are not in operation but exist on papers, confusing the inspection teams.
As per the BGMEA rules, a factory that manufacture and export RMG products get the membership. Factories those only manufacture products are not eligible for full membership. They obtain only the associate membership, and after becoming exporters promoted to full-fledge membership.
RMG sector, the highest foreign currency earner, employs over 40 lakh workers 80% of them women. The sector solely contributes 10% to GDP and earned US$21.51bn in the last fiscal year, which is 80% of the total export earnings of $27bn.