Bangladesh Garment Manufacturers and Exporters Association has sought time extension of reduced tax rate benefit for the country’s apparel makers for next 10 years. In a formal letter yesterday, the association made the request to Finance Minister AMA Muhith as the reduced 10% tax rate benefit had expired at the end of the fiscal year 2013-14. Since the garment owners are required to pay tax at the regular 35% rate from the FY2014-15, they have urged to make the extension with retrospective effect. BGMEA President Siddiqur Rahman met finance minister at the latter’s office yesterday and placed the request along with a written statement explaining the reasons. In the statement, BGMEA said the RMG sector was going through a hard time due to price cut of their products in the international market, rise of production cost, payment of increased wages to workers and expenditure on achieving compliance requirements. When contacted, BGMEA chief told Dhaka Tribune that to draw new investment in the country’s apparel industry and meet the $50bn export target by 2021, the sector should be granted 10% reduced tax rate benefit for 10 more years. He said after the Rana Plaza incident, the RMG sector people had been with the Western retailers initiatives – Accord on Fire and Building Safety in Bangladesh and Alliance for Bangladesh Worker Safety. He said the owners had also worked to implement National Action Plan which was taken to improve safety standards in the factories. Siddiqur Rahman said factory owners had to spend a lot of money for remediation and retrofitting, which increased cost of production. “Besides, devaluation of euro against dollar has further increased the cost. All these matters have made us to seek policy support so we can recover from the tough situation.” According to the BGMEA, price of Bangladeshi RMG products has been cut by 2.45% in the US market and 0.87% in the EU market during January-July of 2015. The euro was devalued by 11.87% against US dollar in last one year.
