There has been no investment in the readymade garment sector in the last one and a half years due to the ongoing pandemic. Nor has any further employment been generated in the sector in this time.
As such, BGMEA proposed keeping the 0.25% tax at source on exports intact and to continue it for the next five years, but in vain. Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), a garment factory owners' platform, said this in talking to The Business Standard.
He was expressing his reaction to the proposed 2021-2022 fiscal year budget, placed before Parliament by Finance Minister AHM Mustafa Kamal on Thursday.
Observing that the nominal 0.25% tax at source on exports should be retained to increase investment in the RMG sector, the BGMEA president said the existing corporate tax rate for the RMG sector also needs to be held steady for the next five years, while the existing 4% government incentive should be increased to 5% in order to increase exports to new markets.
He said "We proposed a 10% cash incentive for the export of garments made of non-cotton/synthetic fibres. It is also necessary to adopt an exit policy for permanent closure of factories that shut down due to the pandemic or political instability in the past. Government assistance is also needed to reopen closed factories.
"The budget has just been proposed. I hope our demands will be taken into consideration during parliamentary discussion in approving the budget," he added.
Faruque Hassan, president of BGMEA