All apparel exporters to enjoy additional 1% cash incentive
The Bangladesh Bank on Tuesday issued a circular revoking its earlier decision that had made existing beneficiaries ineligible for the privilege
The government has made all readymade garment exporters eligible for the additional 1 percent cash incentive after lifting its earlier imposed restriction.
RMG exporters will enjoy the new facility along with the current incentives – to be effective from the start of the current fiscal year – on shipment as per the value of freight on board.
Specialised textile and terry towel makers will also get the special cash incentive facility.
The Bangladesh Bank on Tuesday issued a circular moving away from its earlier decision that had made the existing beneficiaries ineligible for the privilege.
On 10 October 2019, the central bank had issued a circular offering 1 percent incentive for the garment sector, barring exporters who already enjoyed other cash incentives under four categories.
Apparel exporters currently enjoy 4 percent cash incentive against their exports to new destinations beyond the European Union, the US and Canada, 4 percent for export items produced from local fabrics, 4 percent for SME exporters – whose export volume is below $5 million – and 2 percent for exports to euro zone markets.
The special cash incentive will be available with the existing duty drawback and bonded warehouse facilities.
In recent times, the country's RMG export witnessed a negative growth owing to a fall in the global market.
Competitor countries have devalued their local currencies against the US dollar. Bangladeshi exporters are also demanding devaluation for competitiveness.
But Finance Minister AHM Mustafa Kamal recently said that the government is reluctant to devalue the Taka because import volume is higher than export volume.
Instead, he said the government would provide sector-wise incentives.
Mohammad Hatem, the first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, told The Business Standard, "This special cash incentive will help the industry a bit to overcome the ongoing crisis."
"But this incentive is not sufficient, considering the present situation," he said, adding, "We demanded 3 percent at least."
The government announced cash incentives for 37 products and sectors in the budget of the current fiscal year.
Meanwhile, in the first half of the current fiscal year, the country's export declined by around six percent to $19.32 billion, compared to that in the same period in the last fiscal year. Apparel exports also dropped by more than 6 percent, according to the latest data of the Export Promotion Bureau.