Home Apparel Garment accessory producers want 15pc corporate tax

Garment accessory producers want 15pc corporate tax

Manufacturers of garment accessories in the country urged upon the relevant authorities to lower corporate tax to 15 per cent in the budget for the fiscal year 2017-18, so that they can remain competitive to global markets.Currently the accessory manufacturers pay a whopping 35 per cent corporate tax.Garment accessories industries are considered as the backward linkage industry for the readymade garment sector that contributed nearly 90 per cent to country’s export earnings.Garment accessories are closely linked with the apparel sector and work to provide relevant accessories within a short span of time helping garment suppliers to export within the delivery time frame. “So the corporate tax rate for the manufacturers of accessories should be lower to the same at 15 per cent fixed for the garment exporters,” Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) President Abdul Kader Khan said.He expressed the reaction while talking to journalists at his office on Friday over the proposed budget for the next fiscal year.Kader Khan argued that if the corporate tax is reduced to 15 per cent like the RMG sector, it would help increase reinvestment and create more employment.For achieving the middle income country statues and to meet the Sustainable Development Goals (SDGs), there is no alternative to create more jobs, he added.In the proposed budget for FY ’17-18, Finance Minister AMA Muhith proposed to cut corporate tax to 15 per cent from 20 per cent for the RMG sector. But, the garment accessories sector has to pay 35 per cent corporate tax as it remains same like in the current budget.Meanwhile, BGAPMEA has called to bring down tax at source to 0.50 per cent for the next fiscal. Currently, RMG makers as well as the accessories products manufacturers pay 0.70 per cent tax at source.If the government lowered tax at source and corporate tax for the sub-sector of RMG, it would be able to contribute $12 billion RMG export to materialize $50 billion export target by 2021.According to BGAPMEA, in the last fiscal, accessories makers earn $6.12 billion, which is expected to reach at $18 billion by 2025.The platform of the accessories makers also demanded cash incentives against the export earnings as it will help to increase export earnings from the direct export.It is an emerging industry, which is contributing a lot to the economy. But it is very unfortunate that the sector does not enjoy cash incentives against export, said Kader.Our contribution to a complete product is about 15 per cent and considering it the government should provide cash incentives, he added.Since, the workplace safety is a globally concern issue, the government should allow duty-free import of fire safety equipment including fire-proof paint for pre-fabricated building, he added.


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