Bangladesh Garment Manufacturers and Exporters Association (BGMEA) wants Value Added Tax-free import of safety equipment for the next five years. The apex trade body of the clothing industry will place a set of recommendations for the fiscal year 2015-16 at a pre-budget meeting with the National Board of Revenue set to be held on April 26, BGMEA Vice-President Shahidullah Azim told the Dhaka Tribune. If the government withdraws VAT on import, it will help RMG sector ensure safety and security by installing safety equipment as per the requirement of global retailers, said Azim. Due to imposition of VAT on equipment, prices go very high that hinder installation, he added. “We also sought some clarification of issues like VAT and Advance Income Tax (AIT).” The proposal of BGMEA includes continuation of source at tax at 0.30%, 10% income tax for the next five years, incentives for exporters of European Union countries as the price of Euro had been devalued by around 22% last month and suspension of re-audit. BGMEA also wants duty-free import of colour for prefabricated building as it costs higher. The clothing manufacturers will seek loan rescheduling facilities like those that have loan over Tk500 crore. Bangladesh Bank provided loan rescheduling facilities for big borrowers having loans of over Tk500 crore. After the Rana Plaza building collapse, safety issue has become the most challenging for the RMG makers. In the current fiscal year, the government allowed duty-free import of safety equipment to give a cushion to the importers, but they had to pay VAT. According a rough estimate of BGMEA and suppliers, the country’s ready-made garment (RMG) sector needs to spend over Tk2,410 crore on the import of fire equipment—sprinklers and fire doors—to comply with fire safety conditions set by the two retailers’ platforms Accord and Alliance. The sector’s contribution to the national export is over 81%, which amounted to $18.62bn in the first nine months of the current fiscal year. The sector employed over 4.5 million workers, of which 80% are women mostly from rural areas.
