Muhith: RMG tax at source to go up, corporate down

Bangladesh ready-made garments (RMG) manufacturers will have to pay 1% tax at the source for the next fiscal year but corporate taxes are set to decrease, said Finance Minister AMA Muhith in his concluding budget speech at the parliament. Currently, the apparel industry is paying 0.7% tax at the source. For the outgoing fiscal, the government had proposed 1% tax at source. However, later through a circular, the National Board of Revenue (NBR) lowered the rate back to 0.7%. The finance minister made the statement that the proposed increase to 1% would indeed become effective next year when he was making his address on the proposed budget for the Fiscal Year 2017-18 on Wednesday. While tax at source for the RMG sector will go up to 1%, corporate tax for the sector will be 12%, and it will be 10% for green factory owners, said Muhith. In the proposed budget, the government had planned to reduce the corporate tax to 15% from 20% for the apparel sector. It had also proposed a 14% corporate tax for green RMG factories.