The government has planned to impose higher tax on export of apparel items for collecting more revenue from the sector, officials of the finance ministry said. They said that tax at source on export of RMG products might be increased to 1.5 per cent, five times higher, from the existing 0.30 per cent in the upcoming national budget for the fiscal year 2015-16. Tax at source at 0.30 per cent is set to expire next month as the government lowered the tax rate in April 2014 for 14 months from the 0.80 per cent. The government may incur an estimated loss of around Tk 2,000 crore in the period because of reduction of tax at source on export for the sector, according to the estimate of the revenue board. Special tax rate calculation facility which was scraped in last fiscal year for showing increased income from export earnings by the apparel exporters may also not be reinstated, they said. RMG item exporters could show several times income from export earnings than actual ones taking the advantage of the special tax calculation facility under which, from 2005 to June, 2014, taxmen calculated tax at an estimated 10 per cent at the annual tax assessment though exporters paid tax at the rate of 0.80 per cent. Now, the tax will be calculated at the regular 35 per cent as the revenue board in last fiscal year scrapped the facility. Officials said that the National Board of Revenue had already finalised budget proposals including such measures for the sector in line with the instructions of the government high-ups. Top executives of the government think that the apparel exporters now should pay tax at higher rate after enjoying huge tax benefits over the last few decades, they said. RMG exporters enjoy various fiscal incentives that include payment of income tax at reduced rate, cash incentives at 0.25 per cent on freight on board value of export items, duty-free import of raw materials, duty drawback facility and full waiver on utility bills. RMG exporting companies need not pay any other tax on their export earnings, except tax at source paid on export proceeds, as it is considered as final settlement though other sectors have to pay income tax at regular rate of 35 per cent for companies. At the pre-budget discussion with the revenue board in April, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association, however, demanded for continuation of the special tax rate calculation facility and 0.30 per cent export tax for next five years. But the government decided to realise more tax from the sector as the sector has become more resilient and profitable sector, an official of the revenue board said. A large amount of revenue will come as tax at source on export receipts if the rate is increased, he said. Officials said that the NBR primarily made a proposal to increase the tax to 0.80 per cent to one per cent but the government high-ups instructed to set the rate at 1.5 per cent.

Source: https://newagebd.net/123116/govt-wants-to-raise-apparel-export-tax-5-fold-in-budget/#sthash.A8nle14t.dpuf

Apparel exporters may see a large hike in the tax on their export earnings from the upcoming fiscal year. Indications have it that the tax rate may be fixed at 1.5 per cent-a fivefold increase from the existing 0.30 per cent-in the budget for the FY 2015-16. The new national budget will be proposed in parliament on June 4 next. Tax officials said they had lost Tk 20 billion in tax revenue in the sector since April last year, after the government cut down the tax from 0.80 per cent to 0.30 per cent. Also, there might be no special tax rate for the apparel exporters from next year. The government is likely to maintain the normal tax rates for the sector. In the budget for the current FY, the government has withdrawn the special tax rate of 10 per cent. Apparel exporters’ annual tax assessment is now being conducted at the regular rate of 35 per cent, in case of company. The tenure for the special tax rate for readymade garment and knitwear exporters expired on June 30, 2014. Since 2005 until June 30, 2014, taxmen had calculated tax at an estimated rate of 10 per cent at the time of annual tax assessment as part of measures for helping the main export industry come of age and compete on the global market. Finance Minister AMA Muhith speaking at a discussion meeting in the city last Saturday said the apparel industry is now mature enough to pass on some benefits to the government, indicating a hike in tax rate for the industry. The RMG and knitwear exporters are enjoying a pared-down rate of 0.30 per cent in paying tax at source on their export earnings. The taxmen consider it as finally paid tax-known as final settlement-on their entire incomes from export. Tax officials said it would be difficult for the revenue board to achieve the high target for income-tax collection next year unless the government spreads its tax net over the potential sector. “Apparel exporters have enjoyed a lower rate of tax at source for a long time. Time has come to raise the tax rate on the export earnings for mobilization of internal revenue in the next FY,” said a number of the officials. The move evoked a strong plea from the exporters’ side for the government to reconsider the raise at this point of time. Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy urged the government not to increase tax at source in the upcoming fiscal as the sector is struggling to hold its competiveness. “We are facing different challenges to compete on the international market as competitive edge of the apparel exporters is on the decline,” he said. Bangladeshi apparel products have witnessed 1.0 to 2.0 per cent export growth while it is attained 15 to 20 per cent by the global competitors, he pointed out. He said new wages, increase in utility bills, bank interest rates, depreciation of the euro, higher oil prices are the major challenges facing the exporters in addition to the political impasse.

Source: https://www.thefinancialexpress-bd.com/2015/05/26/94144

Nafiu Badaru, a junior civil servant in northern Nigeria’s biggest city Kano, doesn’t make much money and it takes some cash to look good so he tends to buy made-in-China fabric, reports AFP. “A piece of high-quality brocade (cloth) costs around 10,000 naira ($50, 47 euros), which is way too expensive for me,” he told AFP. “With the same amount of money I can buy six pieces of cheap Chinese brocade which cost only 1,500 naira a piece and still keep some change.” The proliferation of Chinese-made textiles is a boon for consumers like Nafiu, with Kano and the wider north struggling with unemployment and economic constraints. But traders in the city — a centre of weaving and textile manufacturing dating back centuries — say such cheaper imports have been disastrous. Factories have shut and trade in home-spun fabrics has dwindled, prompting calls for foreign investment within Nigeria rather than cheap, mass importation, as well as better regulation. Fatuhu Gambo’s business is one of many in dire straits. For the past two weeks he has not sold a single fabric in his shop in the Kantin Kwari textile market — the largest in West Africa. “The Chinese have effectively edged us out of business, leaving us with nothing but huge debts and heaps of goods in our shops,” he said. Talk in the market — a colourful rabbit’s warren of shops and stalls that draws traders from Nigeria, Niger, Chad, Cameroon to Mali and the Central African Republic — is of unfair competition. “The Chinese have taken over the importation and distribution of textiles in Kano and now they are into retail trading, which is putting our traders out of business,” said traders’ union head Liti Kulkul The troubles began a decade ago when Chinese textile merchants started the massive importation of textiles to Nigeria after Africa’s most populous nation opened its doors to foreign trade. The World Trade Organization deal gave the Chinese unfettered access to Nigeria’s textile market, although Nigerian laws prohibit foreigners from retail trading. Traders talk of locals being recruited to conduct business on behalf of the Chinese in return for a cut of the profits. There have been occasional crackdowns, like in May 2012, when immigration officials arrested and deported 45 Chinese nationals over retail trading after repeated complaints. Earlier this month, customs officials arrested four Chinese traders for smuggling mass-produced fabrics and sealed 26 warehouses containing goods on which import duties had not been paid. Hundreds of textile dyers then staged street protests against what they view as a Chinese takeover of their trade that threatens to put 30,000 artisans out of business. The dyers, many of whom still use methods dating back more than 500 years, accused the Chinese of faking their products and selling inferior cloth at a fraction of the price. The situation is just one aspect of the struggle facing Nigeria’s crude-dependent economy, which has been hit hard by the slump in global oil prices since mid-2014. There is little domestic manufacturing to speak of, forcing goods from cars to foodstuffs to be imported. The local Muslim religious leader the Emir of Kano, Muhammadu Sanusi II, met China’s ambassador to Nigeria at his palace recently and called on Beijing to set up factories in the country. “Our over-reliance on foreign products is hurting our economy and the only way to stop this trend is to tackle the problems in the manufacturing sector,” said Sanusi, a former central bank governor. Sa’idu Adhama, a former textile factory owner, said Nigerian traders cannot compete with their Chinese counterparts, who can get bank loans at single digit rates over a longer term. “The Chinese are here legally, so we can’t send them packing but we can regulate their trading,” said Adhama, who studied in China in the 1970s. That could include quotas, stricter enforcement of import regulations, duties and taxes as well as fuel subsidies to boost local manufacturing and help home- grown businesses, he added. Long-term investment in the power sector to stabilise the currently woeful electricity supply could also revive moribund factories, he said. In the meantime, the debate is immaterial to people like Badaru, with cheaper foreign imports satisfying demand for a growing consumer society, whether it is clothing or electronics. “For me and most low-income earners, Chinese textiles are a blessing. They give us the opportunity to appear neat and elegant with little money,” he said.

Source: https://www.newstoday.com.bd/index.php?option=details&news_id=2412210&date=2015-05-25

Prime minister Sheikh Hasina will inaugurate the Central Effluent Treatment Plant (CETP) of Comilla EPZ today (Monday), according to a statement. The executive chairman of BEPZA Major General Mohd Habibur Rahman Khan will be present during unveiling the inauguration plaque at Comilla Town Hall. This CETP will treat the liquid waste of the enterprises of Comilla EPZ which will play an effective role for the environmental development of EPZ and its surroundings. Messrs Sigma Engineers Limited (CETP) constructed the Central ETP at a cost of Tk 385 million. It will refine minimum 15 million cubic metres effluent per day both in chemical and biological system. Among the operating industries in Comilla EPZ, 11 industries which need ETP being connected with CETP by shutting down their own ETP. The treatment cost will be reduced and the quality of refinement will be increased by treating the effluent centrally. The enterprises will be charged TK 27.50 per cubic metre to treat their effluent. No separate ETP will be needed for the enterprises of Comilla EPZ after the inauguration of the CETP.

Source: https://www.thefinancialexpress-bd.com/2015/05/25/93989

Garment accessories makers yesterday demanded cash incentives on exports in the upcoming budget, saying they are contributing to almost all export-oriented sectors. The accessories makers are not under the government’s incentive policy although the garment sector has been enjoying such benefits for a long time, said Rafez Alam Chowdhury, president of Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association.The leaders of the association demanded the incentive at a pre-budget meeting with Finance Minister AMA Muhith at his secretariat in Dhaka. However, Chowdhury did not mention how much cash incentive they want. Garment exporters now enjoy 5 percent incentive on their exports.The accessories makers have increased their capacities and are able to meet the demand of garment exporters almost entirely, he said. Previously, the demand for such accessories was met through imports, he added.In the plastic sector, accessories makers supply 39 kinds of materials; in the garment sector, they can supply 48 types of products such as poly bags, hangers, plastic clips, buttons, button tags and zippers, Chowdhury added.He also urged the finance minister to allocate funds to facilitate the establishment of a packaging and accessories institution for skills development.The association also demanded a loan rescheduling facility, as the country’s exports were affected by prolonged political unrest at the beginning of the year.The government should also maintain the current rate of tax at source at 0.3 percent for the next five years so that the export-oriented sectors are not affected, Chowdhury said.He urged the government to grant a down payment option in loan rescheduling for all export-oriented sectors, just like the facility given by the government to borrowers of Tk 500 crore or more.Muhith said he might not give any stimulus package to any sector in the upcoming budget.But after the budget is placed in parliament on June 4, an inter-ministerial decision will be taken on the stimulus package issue through consultations with government high-ups and sector people.

Source: https://www.thedailystar.net/business/accessories-makers-ask-cash-incentives-86956

Overseas work orders for the country’s apparel industry have started to rise, as an apparently calm political situation in the country has restored confidence of global clothing retailers. According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data, the number of taking Utilisation Declaration (UDs) that reflects the trend of production to be performed has increased in April compared to previous months. RMG product manufacturers have taken 2,704 UDs, which were 2,415 in March, BGMEA data showed. From the very beginning of January, the country’s export-oriented RMG and other sectors suffered severe trouble due to political unrest that took a heavy toll on the economy. As a result, the global retailers lowered placing their work orders as they were afraid of timely shipment. “The work orders for the clothing industry increased as the global buyers are feeling much more confidence due to calm political situation after a setback in January-March period, BGMEA Vice-President Reaz Bin Mahmood told the Dhaka Tribune. On the other hand, positive inspection report on safety standards also acted as a catalyst, said Reaz. The present trend of placing work orders also proves that the buyers kept their promises of not leaving Bangladesh in sourcing RMG products, Reaz added. It is a good sign for Bangladesh and it has been proved that Bangladesh’s RMG sector is safe which is again on track, he further said. “As the uncertainty is over, the orders will increase as usual, Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told the Dhaka Tribune. These orders do not reflect the full-fledged confidence of buyers and it may be the reflection of seasonal orders, said Salam. “If the trend continues, we can make a comeback.” But the Giant Group Managing Director, Faruque Hassan, said though the sector witnessed a rise in getting work orders, it did not reach an expected level. Production cost has increased due to compliance issues, and because of higher prices, Bangladesh fails to gain expected works orders, observed Faruque. He emphasised competitiveness for regaining the momentum of work orders. According to Export Promotion Bureau (EPB) data, in July-April period of the current fiscal year, Bangladesh earned $20.56bn by exporting clothes, which is 2.98% higher compared to the same period in last financial year. Currently, RMG sector contributes over 81% to the total export earnings. The government has also set the export target of over $26.89bn for the apparel sector, which employed over 4.4m workers, mostly rural women.

Source: https://www.dhakatribune.com/business/2015/may/24/apparel-industry-back-track#sthash.ribEMITC.dpuf