MINDTREE
Q-and-A
Has the 46th National Budget for the Fiscal Year 2017-18 been as per your expectations?
Any special sops/initiatives that you would have liked to include for the garment
industry to further boost up its growth and development?
Please share your views…
Sultan Ahmed, Managing Director, RASA FASHION
INTERNATIONAL/S&S Fashions International
As a garment manufacturer, I cannot say that the 46th National Budget
has fulfilled our requirements. We are especially concerned about
Source Tax which we have to bear at 1% against our export value.
We know very well that after payment of material cost, accessories
cost, workers’ wages, utility bills, banking and logistics expenses, a
factory may not get more than 2-5% of export price considering how
competitive the global apparel market has become in terms of price. So
from this 2-5%, if Government claims 1% as Source Tax, I do not think
this is logically just.
Bangladesh garment factories are continuously losing the strength to
compete with other rival countries in exports. Since last few years, we
could not even achieve our export targets and this year too, our export
growth is below 3%, which is a big indicator of how slow business is.
Our Government should understand the realities while also considering
the fact that RMG sector is earning over 80% of the country’s total
export earnings besides offering employment to a large chunk of the
population.
Nowadays, it is very hard to earn much more from garment exports as
buyers are continuously asking to reduce prices; adding to which are
increasing production overhead costs, labour costs, energy (electricity,
gas, etc.) as well as utility costs. Further factories are investing a lot
on structural development/remediation as per buyers’ compliance
requirements.
Also to be taken into account with context to Budget is that the
Government is yet to declare the incentive of 5% for the next two years
which our association (BGMEA) claimed for before the Budget. This
incentive is necessary to strengthen the sector and give it a competitive
edge.
Our aim is to cooperate with the Government and help grow our
country’s economy by earning more foreign currency and create more
job opportunities for our people and build a happy nation.
A.F.M. Sarwar Mahboob, Director,
Tusuka Apparels Ltd.
The Budget for fiscal 2017-18 is quite business-friendly from my
perspective, as any kind of tax deduction is good for business.
However, due to global crisis, business has become little difficult
and to survive in this scenario amidst rising global competition,
our Government should provide some facilities. As such, I would
like to recommend the Government to cut the rate of Tax at
Source for next couple of years, which would be of great help for
the RMG business.
10 Apparel Online Bangladesh | JULY 2017 | www.apparelresources.com
Syed Nurul Islam, CEO, Well Group
Considering the reality, I should say the Budget has been more or less on
the expected lines. The Government has reduced the Corporate Tax for
RMG to 15% from 20% whereas other sectors are paying 25%.
As for new initiatives, I think we need to explore new markets based on
Government-given incentives for new market access. Beside that, I was
expecting source tax at 0.70%, as it was earlier.
Sarwaruzzaman Khan, Managing Director, BSA Group
Considering the reduction of Corporate Tax from 20% to 15%, I should
be happy with the Budget. But due to some unprecedented steps taken
by the Government in the proposed Budget, I’m not fully satisfied.
These days business has become difficult due to rising competition.
Bangladesh is facing consistent challenges from its fierce competitors
like Vietnam, Cambodia, India and Pakistan and if the Government
fails to support the industry properly, it’ll be difficult for us to retain our
market position. So, I would like to request the Government to make
Budget more business-friendly.
Md. Kayum Mollah, Chairman, KNA Sourcing Ltd.
This Budget is not good for the business community. Finance Minister
has increased the Tax at Source to 1% which is no positive news for the
business, and I would like to echo the demand of BGMEA which earlier
maintained that the Government should cut the rate of Tax at Source for
at least next 2-3 years.
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NEXT MINDTREE QUESTION
The growth of the Bangladesh apparel industry
has apparently slowed down in the last couple
of years? What (factors) according to you
could arrest this decline and boost further
growth?
Please share your views…