Business

TK 12000 CR FACILITIES SOUGHT IN THE BUDGET

RMG leaders call for 5pc cash incentives, currency devaluation,VAT exemption

Business Report
In a pre-budget press briefing BGMEA leaders urged the government to offer 5 percent cash incentives and continue the existing subsidies to garment manufacturers and exports of all categories to overcome crisis that the industry is facing at home and in international market.
They said rising production cost and decline in garment prices in global market are affecting the industry seriously threatening most garment owners to lose hold on the situation and small one are particularly facing the existential crisis.
Ms Rubana Haq, the newly elected BGMEA president listed a number of demands that include reducing corporate tax to 10 percent from 12, keeping existing tax at source to 0.25 percent, devaluation of taka against dollar with a Tk 5 extra bonus rate for exporters, new facilities for workers, relaxing rules for bonded warehouses and exemption of VAT on all garment related purchase.
She has also demanded setting up a Tk 300 crore fund for garment industry for use as bail out for factories facing financial crisis. BGMEA demands may cost the government a total of around Tk 12,000 crore, she said calling for urgent budgetary steps are needed to protect the industry.
At present, garment shipments to new markets — which are destinations other than the US, the EU and Canada — and the use of local yarn get 4 percent cash incentives.But now, the apparel and textile makers have demanded 5 percent cash incentives for all export shipments for the next five years.
The ongoing trade war between the US and China and the suspension of trade benefits by the US for Turkey have created good opportunities for Bangladesh’s garment sector, RubanaHuq said calling for measures to improve competitiveness of garment and textile industry to take advantage of the situation.
Leaders of the Bangladesh Textile Mills Association (BTMA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Exporters Association of Bangladesh (EAB) were present at the press conference held at the Amari Dhaka hotel.
She also called for keeping all kinds of purchases for export purposes out of the purview of VAT, corporate tax cuts for garment companies from 12 percent to 10 percent and duty-free import of all kinds of safety equipment.
Some exporters’ loans should be rescheduled for a longer time as they are facing challenges in running their factories.“Such a move will create more job opportunities as small and medium enterprises will be able to rerun their units.”
Mohammad Ali Khokon, president of the BTMA, urged the government to give 16 percent cash incentives on apparel exports to the US markets as Bangladeshi product face 15.62 percent duty there.
“High duty to the US erodes our competitiveness,” he said, while also calling for a 10 percent corporate tax rate for textile companies. Mohammed Hatem, senior vice president of the EAB, urged the government to simplify the process for getting cash incentives.
“Exporters have to face a lot of difficulties in receiving the incentive money,” he said. Mansoor Ahmed, first vice-president of BKMEA, also spoke.

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