Expressing grave concern over the proposed hike in source tax, leaders of the country’s accessories and packaging industry have urged the government to reduce both source tax and corporate tax for the sector. “The national budget for the upcoming fiscal has proposed 1.5 per cent source tax for export-oriented sectors including accessories and packaging industry which will hamper the regular export activities and lessen competitiveness,” Abdul Kader Khan, president of Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said at a press conference on Monday. The conference was organised at a city hotel to express their opinions on the proposed budget for the fiscal year 2016-17. The BGAPMEA leader said 150 per cent hike in source tax would definitely discourage investment which would also result in less employment. “Any impact on the RMG industry also affects the backward industry.” He demanded re-fixing of existing 0.60 per cent source tax for the sector. Mr Khan said the budget also proposed a cut in corporate tax to 20 per cent from existing 30 per cent but only for the ready-made garment (RMG) industry. Some 1,500 units produce 30-35 types of accessories including polybag, button, zipper, hanger and elastic, he said, adding that these units meet nearly 90 per cent of the demand of export-oriented sectors including RMG, leather and footwear, ceramic, frozen fish and pharmaceutical. The local units meet 80 per cent demand of the RMG sector and also help the RMG makers produce apparel products at a competitive price and meet their short lead time. “As a backward linkage industry of RMG, we urge the government to reduce the corporate tax to 10 per cent for the garment accessories and packaging industry,” Mr Khan added. “Though the government provides cash incentives to other export-oriented sectors, we are yet to get any such support, even our deemed export earnings stood at $ 5.60 billion in last fiscal,” said Rafez Alam Chowdhury, former president of BGAPMEA. Some 20 per cent of the locally-made accessories are also directly being exported worldwide, he said. He also demanded cash incentives for the sector to help local accessory makers explore new markets and boost direct exports, saying that they have the capacity to increase direct exports. The BGAPMEA leaders reiterated their demands for allowing the association to issue utilisation permission for its member factories and sought financial support to set up an institute to generate skilled manpower. The association also hailed the proposal for extending the duty waiver facility for fire equipment and pre-fabricated building materials’ import for other export-oriented sectors.
