Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the National Board of Revenue (NBR) to continue and settle down the existing 0.30% tax at source on export for the next five years. The leaders of the apex body have also requested the NBR to exempt the apparel makers from all kind of tax including import-duty, Value Added Tax (VAT) and Advance Income Tax (AIT) on the import of construction materials for the factories to be constructed in Garment Economic Zone. BGMEA President Atiqul Islam came out with a set of recommendations to the NBR for considering in the budget for the fiscal year 2015-16 at a meeting with revenue body held at its headquarters in the capital. NBR Senior Member Farid Uddin chaired the meeting. He also demanded same sort of tax benefits for importing Fire Proof Colour Coating to be used as pre-fabricated building materials. Attending the meeting, Atiqul said: “We’ve introduced a website called ‘fair factory clearing house’ to meet the demand from the buyers following devastating Rana Plaza collapse.” “Buyers representing 220 brands from across the world can now have updated information on 1700 factories under the platform of BGMEA. They can also be informed about any crack or any error in the factories from our website, so no factories excepting the compliant ones can run business in Bangladesh,” he said. Regarding the upcoming budget, the BGMEA President opined that the budget was set to be a challenging one. Demanding special benefits for RMG sector from NBR in this coming budget, he also recommended the NBR to continue income tax at a minimised rate of 10% for the next five years. The other demands from the apparel makers include duty free import of fire preventing and energy saving machinery for a compliant and green industry, withdrawal of authority from ‘Custom Valuation and Internal Audit Commissionerate’ in regard to the inspection of bonded warehouse benefits enjoyed by export oriented apparel factories, finalisation of 3% interest rate on loans against Effluent Treatment Plant construction, etc. In case of VAT, the association proposed total exemption of VAT on the use of gas, water and electricity. Atiqul Islam requested the NBR to exempt the due VAT piled up on the purchase of local products from 2005 to 2012. “We are enjoying VAT exemption on purchase of products from local market since 2013, but now, the NBR is claiming VAT from us for the previous years that we are unable to pay now,” he said. Atiqul asked the NBR to exempt them from VAT on different services including laboratory test charge, consultancy charge, compliance audit charge, legal consultancy charge, CSR-related charges, building construction charge, courier service charge etc. The NBR should allow the apparel exporters to get 2% special cash incentive, instead of current 0.25% on free on board (FOB) prices, opined the BGMEA. In response, NBR member Farid Uddin praised the apparel manufacturers for three reasons-contribution to the country’s foreign currency income, employment generation and women empowerment, and also for branding Bangladesh abroad. He also stressed on a partnership among NBR, Bangladesh Bank, Banking Institutions and businesses to go forward with integrated approach. At the same meeting, the NBR also discussed with the representatives from Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), Exporters Association of Bangladesh (EAB) and Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA). BGAPMEA President Rafez Alam Chowdhury urged the NBR to authorise the association to give Utilisation Permission (UP) to its members. He also noted that NBR should allow the organisations to avail continuous or extension of the bond facilities for the members of BGAPMEA to boost export. BGAPMEA’s other demands include duty-free import of materials for pre-fabricated building construction, incentive package for exporters, allowing each export-oriented factory with duty free import of a delivery van for product distribution, and consideration of whole factory premises as bonded area. Meanwhile, the BKMEA requested NBR to introduce tax at source on cost of making, instead of free on board prices, increase of cash incentive at 8% from existing 5%, duty and VAT free import of fire safety equipments, and duty free import of all retail machinery.
Source: https://www.dhakatribune.com/business/2015/apr/30/bgmea-keeping-03-tax-source#sthash.ZHQwtHyM.dpuf
