The demands were placed at a pre-budget meeting the NBR
The apparel manufacturers demanded exemption of value-added tax (VAT) on all kinds of products and services purchased from domestic sources for the export-oriented clothing industry in the next budget.
“We should get the VAT exemption to make exports more competitive in the global market,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, at a pre-budget meeting with the National Board of Revenue on Wednesday.
The products and services include sub-contracting, printing, courier services, consultancy fees, legal services, engineering services, compliance audits, expenses on corporate social responsibility and the cost of factory establishment.
At the same time, the government should keep the export-oriented apparel factories out of the purview of VAT return submission, she added.
The leaders of the BGMEA and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also urged the government to bring down the tax at source to 0.25 per cent from 0.50 per cent and keep it effective for the next five years to remain competitive in the global export markets.
The apparel makers also urged the government to keep the corporate tax unchanged at 12 per cent and 10 per cent for the certified green factory owners in fiscal 2021-22.
“Considering the impact of the pandemic on the apparel sector and for the greater interest of investment and exports, the government should keep the corporate tax unchanged and it should be effective for next five years,” Huq said.
The garment exporters also demanded a withdrawal of the 10 per cent income tax on cash incentives.
Meanwhile, the BKMEA demanded zero duty on imported chemicals used in the effluent treatment plant to ensure zero discharge of hazardous chemicals (ZDHC) for the betterment of the environment.
It also called for duty-free import of electricity-efficient equipment or spare parts such as LED lamps, tubelights and spare parts for fire safety equipment to make factories environment-friendly and safer.
Sometimes, factory owners need to expand factories to increase exports as well as to meet the buyers’ requirements on compliance.
To do so, an owner has to import fire equipment or parts of fire equipment for the extension, Huq said.
“So, we are urging the government to include these types of products under the duty-free import facilities,” she added.
On top of that, the apparel exporters also urged the government to ensure hassle-free release of goods when returned by the global apparel brands due to the pandemic.