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Accessories makers want corporate tax brought down to 12%

  • Published at 09:23 pm April 2nd, 2018
  • Last updated at 09:25 pm April 2nd, 2018
Accessories makers want corporate tax brought down to 12%
Bangladesh garment accessories and packaging manufacturers want 12% corporate tax for the fiscal year 2018-19 to boost exports and attract new investments. Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), a platform of the RMG backward linkage industry, made the call in its proposal that is to be placed before the National Board of Revenue (NBR) on Wednesday in a pre-budget meeting. “Despite being a fully export oriented industry, the garment accessories and packaging manufacturers are paying 35% corporate tax,” said BAPMEA in the proposal. Meanwhile, the knitwear and woven products exporters are paying 12% corporate tax. It is 10% for the garment owners who are manufacturing products at certified green factory. It is  discriminatory behaviour to the sector,” the platform explained. For the sake of the country’s economy and exports, the association urged the government to bring down the corporate tax rate to 12% for the next fiscal year for the sector. As per the export policy, there is no difference between the deemed export and direct export earners. But BAPMEA said that this policy is not being followed and, as a result, they are being deprived of the due support of the government. Export of garment accessories and packaging products are defined as deemed export. However, the platform called to bring down tax at source to 0.50% instead of 0.70% and consider it as final settlement. BGAPMEA President Abdul Kader Khan told the Dhaka Tribune: “As a backward linkage industry of the RMG sector, we are contributing over $6 billion to apparel exports. But unfortunately we are not getting any recognition for our contribution.” According to BGAPMEA data, garment accessories and packaging sector earned $6.7 billion in the last fiscal year. Urging the government to set corporate tax at 12% in the next budget for the sector, Kader said: “Considering the sector’s contribution to employment generation and foreign currency earning, the government should offer equal policy support for us.” If the government sets corporate tax at 12%, there will be more investment in the industry as it would maximize a funds availability for such ventures, he added. Meanwhile, insiders from the sector also urged the government to provide cash incentives – similar to what the other export oriented industries are enjoying against its export earnings. Kader said: “If we get policy support including cash incentives against export and equal corporate tax rate like RMG sector, our sector would be able to earn $18 billion by 2025.” The association also asked the government to declare the entire factory area as “bonded warehouse area.” It argued that sometimes the imported goods are kept scattered in the factory area due to time constraint. And the customs authority imposes fines for it during inspection. Currently, Bangladesh meets about 90% demands of garment accessories and packaging goods for the RMG sector.
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