In the SRO, NBR said that apparel exporters would pay 0.25% tax at source until June 30, 2020
In a bid to boost export earnings from the readymade garment (RMG) sector, the government has cut tax at source on export receipts from apparel products from 1% to 0.25% for the current 2019-20 fiscal year.
The National Board of Revenue (NBR) on Monday issued a statutory regulatory order (SRO) in this regard.
In the SRO, NBR said that apparel exporters would pay 0.25% tax at source until June 30, 2020.
If 1% tax at source was enforced, RMG exporters would have to pay Tk1 for every Tk100 they earned. Now they will only have to pay Tk0.25 under the new directive.
The tax authority reduced source tax on RMG's export earnings twice during the last fiscal year -- from 1% to 0.60% in September 5 last year ---and then to 0.25% in January this year, in the face of demands from apparel makers.
On September 12, Rubana Huq, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), sent a letter to Nojibur Rahman, principal secretary to the prime minister, seeking the reduction.
Tax at source was 0.30% during the 2014-15 fiscal year, which later doubled to 0.60% in the next 2015-16 fiscal.
While a jump from 0.60% to 1.5% was proposed during the 2016-17 national budget, it was later set at 0.70%, and continued into 2017-18.