Readymade garment exporters on Saturday sought five per cent of freight on board price as cash incentive in addition to the incentives they are now enjoying and exemption from paying tax at source for the next two years.‘Considering the present situation of the country’s RMG sector, we urge the government to announce 5 per cent of FoB price as cash incentive in addition to the existing facilities for BGMEA and BKMEA member factories in the upcoming budget for the financial year 2017-18,’ Bangladesh Garment Manufacturers and Exporters Association president Md Siddiqur Rahman said at a press conference at the association’s office in the capital Dhaka.He said that the RMG sector would be able to rebound if the government provided the support for the time and the source tax on the sector should be exempted for the next two years in the next budget.The BGMEA president also demanded reduction of corporate tax to 10 per cent from the exiting 20 per cent for the next five years.‘We are not against paying of tax but demanding exemption of source tax for overcoming a lots of challenges including a fall in demand for RMG items on the global market, a decrease in the prices of Bangladeshi products and a huge cost of remediation to ensure safety in the factories,’ he said.Currently, RMG exporters pay source tax at the rate of 0.70 per cent on export proceeds as the final settlement.Siddiq said that the apparel sector had been passing through a tough time at home and abroad due to volatility in global economy, deprecation of the euro, impacts of the US presidential election and Brexit and production cost increase due to an acute gas shortage in last two years.He said that the cost of production increased by 18 per cent in last two years and exports declined by 6.80 per cent in the US market and by 5.91 per cent in the UK market in July-April period of the current financial year.Siddiq said that RMG export earnings grew by around 13 per cent annually during the last 10 fiscal years while the earnings registered only 2.21 per cent growth in 10 months of the current fiscal year.Policy support is a must for the readymade garment sector in the upcoming budget to sustain the competitiveness of the sector and to generate employment, the BGMEA president said.Requesting the government for policy stability, Siddiq said that frequent changes in policy discouraged entrepreneurs from making investment.Asked why the 35-year old RMG sector still needed incentives, the BGMEA president claimed they were not getting any incentive from the government.He, however, said they only got incentives against exports to new markets.
