Apparel exporters will have to pay advance income tax on export earnings at the rate of 1 per cent in the next fiscal year 2017-18 instead of the current 0.7 per cent, officials of the National Board of Revenue said. Readymade garment owners, however, will enjoy benefit in corporate income tax as finance minister AMA Muhith in his budget speech on Thursday proposed to lower the corporate tax for woven and knitwear goods manufacturers to 15 per cent from the current 20 per cent.
The corporate tax rate for green building certificate holding apparel companies will be 14 per cent, according to the budget proposal. Officials of the NBR said that the existing statutory regulatory order (SRO) under which readymade garment exporters paid AIT at the rate of 0.7 per cent in the outgoing FY 2016-17, would expire on June 30. Tax on export proceeds for other sectors will also be retained at 1 per cent in the next budget because of the same reason, they added.
Finance minister AMA Muhith in his budget speech on Thursday also did not make any proposal about the tax rate on export earnings. Exporters have been demanding either to withdraw or lower the export tax to 0.5 per cent to make the sector competitive with competing countries.
