The revenue board has found 51 per cent of the garment companies refraining from submission of tax returns in what is seen as poor tax compliance in the country’s main export industry. As per the finding, 49.28 per cent of the garment companies submitted tax returns in the Fiscal Year 2014-15. The National Board of Revenue (NBR) received tax returns from 2,218 garment companies in the last FY out of 4,500 readymade garment companies operating in the country. According to the data of the apex apparel association–Bangladesh Garment Manufacturers and Exporters Association (BGMEA)–there are 4,500 readymade garment companies, including knitwear and woven garment factories. Tax officials said tax-return submission by these companies is one of the poor in Bangladesh. In the analysis, the NBR has found some 1,017 garment companies having submitted tax returns in the FY 2015-16. The time for submission of their tax returns will expire on June 30, 2016. Talking to the FE, BGMEA president Siddiqur Rahman expressed his surprise over the data on tax-return submission by garment owners. “As far I know, all of the readymade garment companies submit tax returns. Members of BGMEA will not be able to renew their licence without submitting a copy of tax receipt,” he said. He thinks there may be pending cases with some companies due to disputes with the taxmen that caused delay in submission of tax returns. Centre for Policy Dialogue (CPD) Executive Director Professor Mustafizur Rahman said the revenue board should check and find out the reasons for poor submission of tax returns by the garment companies. Various incentives that the government provides to the sector should be linked with tax compliance, he suggested. “Tax-compliant companies should be eligible for enjoying government incentives,” he said. The government deducts tax at source at a rate of 0.60 per cent on export bill of apparel exporters. Later, the exporters adjust the amount by calculating their income at regular corporate tax rates of 35 per cent. Until June 30, 2014, the exporters had enjoyed a special rate of tax at 10 per cent at the time of calculation of their income. Apart from export-oriented garment industries, local garment companies have to pay tax at regular corporate rate.
