Ready-made garment (RMG) accessories and packaging manufacturers have not had their expectations met from the proposed budget of FY2021-22, say industry representatives.
Despite announcing a business-friendly budget, the expectations of small and medium-sized export-oriented garment accessories and packaging industries have not been fulfilled, they say.
Md Abdul Kader Khan, president of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said the accessories and packaging sector is also a full-fledged export-oriented sector.
But the sector never got equal opportunities provided for direct and indirect exporters, like the textile and other industrial sectors.
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BGAPMEA demanded to reduce the corporate tax rate, to halve the tax at the source of export, and to withdraw the existing income tax on the purchase of raw materials for export from the local market.
Md Abdul Kader said that they proposed to fix the corporate tax at 10-12% like other RMG-related and exporting sectors.
“But in the proposed budget, it has been reduced from 32.5% to 30%. To overcome the current financial crisis, we have applied for a revised circular to fix the corporate tax at 12% for green factories and 15% for other factories.
“Moreover, we also applied to fix the tax at source at 0.25% from existing 0.5%,” he added.
The BGAPMEA president also said that they requested an exemption of VAT on products and services collected from the local market by the export-oriented industries and also requested for exemption from section 19 to encourage exports.
“But the proposed budget did not reflect that which would discourage the packaging industry. However, this industry meets about 95% of the packaging demand for the export-oriented RMG industries of the country,” said Khan.
Earlier, more than 35 products were brought under the coverage of financial incentives to encourage exports.
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“Although the garment accessories and packaging industries are 100% export-oriented small and medium enterprises, the sector has not gotten this opportunity yet,” he also said.
In response to the budget, BGAPMEA has called for a minimum 1% export incentive in proportion to the hidden exports in the interest of keeping the garment accessories and packaging industry competitive.
“As there is still time to approve the budget, we demand 1% cash incentives similar to the RMG sector and other export-oriented sectors provided by the government for the well-being of the garment accessories sector,” he added.
Finance Minister AHM Mustafa Kamal presented the proposed national budget of Tk603,681 crore for the 2021-22 fiscal year in the parliament on June 3.
