The Bangladesh Garment Manufacturers and Exporters Association has demanded that the government reinstate 0.25 per cent source tax on export earnings for the readymade garment sector and consider the tax as final settlement. In a recent letter, BGMEA president Rubana Huq requested the principal secretary to the Prime Minister’s Office to take necessary steps for reinstating the tax at 0.25 per cent to facilitate the country’s RMG sector in surviving amid challenges in both domestic and international markets. The National Board of Revenue in January this year had reduced further the source tax on export earnings to 0.25 per cent from 0.60 per cent. As per income tax law, the regular rate of source tax on export earnings is 1 per cent which has been reinstated in the budget for the current fiscal year of 2019-2020 after the expiry of the reduced tax rate facility on June 30. The PMO on July 2 sent the BGMEA letter to Internal Resources Division senior secretary Md Mosharraf Hossain Bhuiyan, also chairman of the NBR, for taking necessary measures in this regard. In the letter, Rubana said that reduced tax rate should be reinstated to make the RMG sector capable to face the challenges it was facing in the international market. The cost of business operation is needed to be kept as low as possible to maintain competitiveness of the sector in the international market, she said. The prices of apparel products did not increase though production cost increased due to additional expenditure for remediation related to compliance, and hike in transport cost and utility bills, the BGMEA president said. She also said that apparel makers were also facing difficulties in operating their business with maintaining competitiveness due to hike in wages for workers. Minimum wages for apparel workers came into force from December, 2018 with 51 per cent rise in minimum wages to Tk 8,000 from Tk 5,300, she said. Officials of the revenue board said that they were yet to get any instruction from the government high-ups on the issue. The NBR will take next steps in line with the government’s instruction, they said.
