BGMEA demands continuation of 0.5% source tax for 5 years

The garment exporters today demanded continuation of the existing 0.5 per cent source tax for the next five years.

Usually, every year the apparel makers demand reduction of the source tax to 0.25 per cent before and after the budget.

But this year they came up with the call to keep the tax same for some time, as Finance Minister AHM Mustafa Kamal in his budget speech on June 3 did not clearly mention any rate of source tax.

"The changes in source tax would hamper the business plan," said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"So, we demanded continuation of the existing rate of 0.5 per cent source tax, as same source tax is better for long-term business planning."

He spoke at a press conference at the BGMEA's Uttara office in Dhaka to express the association's budget reaction.

Hassan also demanded 10 per cent cash incentive on export receipt of garment made from non-cotton fibre.

Globally, the fashion industry has been shifting to manmade fibre thanks to their environment-friendliness, functionality and durability.

However, Bangladesh is still very weak in the trade of manmade garment items and the competing countries have been making strides in non-cotton fibre garment business.

Manmade fibre garment occupies 78 per cent of the global business while cotton made fibre the rest 22 per cent.

However, some 74.14 per cent of Bangladesh's garment export earnings come from cotton made garment items.

So, Bangladesh is lagging behind in the mainstream business of manmade fibre garment worth few hundred billion dollars globally.