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Apparel exporters want 5% cash incentives

  • Published at 08:53 pm May 27th, 2019
Apparel exporters want 5% cash incentives
BGMEA president Rubana Huq addresses a pre-budget joint press conference of BGMEA, BKMEA, and BTMA in the capital on Monday Dhaka Tribune

However, Exporters Association of Bangladesh (EAB), a platform of exporters, has demanded 5% cash incentives for all exports goods for the next five years

Apparel exporters want 5% cash incentive in the budget for the fiscal year 2019-20 against exports of clothing goods to all destinations for the next five years to help the exporters turn around in this crucial time. 

However, Exporters Association of Bangladesh (EAB), a platform of exporters, has demanded 5% cash incentives for all exports goods for the next five years.   

Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Textile Mills Association (BTMA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Exporters Association of Bangladesh (EAB) made the demands at a pre-budget press conference in the capital on Monday.     

“In the context of present critical situation, the government should provide 5% cash incentive on freight on board (FOB) prices against the export of apparel goods to protect the export-oriented garment sector. This incentive will be applicable only for the BGMEA and BKMEA members,” BGMEA president Rubana Huq said.

The apparel sector was employing the highest number of people and paying more to the economy in many ways, so there was nothing wrong about the demand for 5% cash incentives, Rubana reiterated.   

The present context, she mentioned, was different from the previous one as after taking the charge of BGMEA, the new board declared 22 factories closed as they were unable to pay wages of workers. 

Work orders were less in number due to election period uncertainty so if the government gave them 5% incentives, the sector would be able to turn around, otherwise it would suffer, the BGMEA president urged.

Currently, apparel exporters enjoy 4% cash incentive only against export to non-traditional export destinations.   

Providing 5% cash incentives on exports would cost Tk11,724 crore more on the existing amount and it was not a very big amount in a budget of Tk500,000 core, the BGMEA president pleaded. 

Considering the present status of the sector, the government should continue the existing 0.25% tax at source and treat it as the final tax, she demanded. 

Exports to US was increasing by 16% to 17% because of the US-China trade war, so there was a big opportunity for the Bangladeshi apparel goods to grow there, said Rubana Huq.      

The trade leader on behalf of the textile and garment sector urged the government to keep corporate same tax at 12% for the traditional factory owners and 10% for the apparel makers producing goods in certified eco-friendly factory.    

In addition, the apparel sector also sought special allocation for the wellbeing of the workers such as  establishing dormitories and ration. 

On top of that, the sector people also called for single digit loan facilities for the apparel sector and ensuring its proper implementation.

EAB has demanded 5% cash incentives against exports of all goods including woven and knitwear products for the next five years.   

“Exporters are in a critical situation, so the government should give 5% cash incentive for all the export goods, which will help overcome the situation,” EAB Senior Vice-President Mohammned Hatem said. 

It would cost Tk14,000 crore, if the government gave 5% cash incentive against the exports of all goods, Hatem estimated.   

He also urged the government to remove the hassles in getting the cash incentives as ambiguity brings corruption. 

Mentioning the recent export performance in the US markets, the sector people called for 16% cash incentive against the export to the American market. 

They mentioned that there was higher import duty raging from 16.5% to 30% in the US market.

“Giving special attention to the exports of knitwear and woven goods, denim, home textile, terry towels to the US market, the government  should provide 16% cash incentive and keep special allocation in the budget for the fiscal year 2019-20,”  BTMA president Mohammad Ali Kokhon said.