The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has asked the government to keep the corporate tax rate for the RMG sector at the existing 12%, instead of increasing it to 15% as per the proposed national budget for FY19.
The BGMEA has also urged the authorities to keep the corporate tax rate for green factories at the existing 10%, instead of increasing it to 12%, and recommended that tax at source (TDS) be exempted for the next three years.
BGMEA President Md Siddiqur Rahman made these remarks while addressing at a post-budget press briefing at his office in the capital on Saturday.
“The government has proposed to reduce corporate tax by 2.5% for banks, in the proposed budget for FY19. But the corporate tax rate for the RMG sector, which creates employment, has been increased by 3% to 15%. This is not expected by any means,” Siddiqur said.
“After speaking with the government, we will be able to settle the corporate tax and TDS rates,” the BGMEA leader added.
Regarding TDS, Siddiqur said: “Last year,the TDS was set at 1% in the gazette notification, but we were able to reduce it after discussing the matter with the government. Hopefully, we will be able to do the same this year. However, I think the government should exempt TDS for the next three years, considering the present situation and the betterment of the apparel sector.”
Also urging that the RMG sector be exempted from VAT, the BGMEA president said: “As an export oriented industry, we have long been urging the government to keep the RMG sector out of Value Added Tax (VAT), as it is quite impossible to maintain accounts at every stage of purchase.”
Currently, there are 67 certified green RMG factories in Bangladesh, and a total 50 apparel companies listed with the Dhaka and Chittagong stock exchanges. The $28 billion RMG industry employs about 4 million workers, most of whom are women, and comprises over 82% of the overall exports of Bangladesh.
BGMEA Vice president Abdul Mannan was also present at the press briefing.
