BANGLADESH CANVAS
15% Corporate Tax for RMG sector proposed in Budget
Giving a further boost to the
readymade garment industry – the
highest foreign currency earner for
Bangladesh – the Government has
proposed to reduce the corporate
tax for the sector to 15 per cent
from the existing 20 per cent, in the
Budget for FY 2017-18.
The garment industry is playing
a vital role in the economic
development and employment
generation of the country, said
Finance Minister AMA Muhith
while justifying the tax cut during
presentation of the Budget in the
Parliament.
“This sector is under manifold
pressure due to adversities in the
international market…Considering
the contribution of this sector in the
economic growth and employment
generation, we have been providing
various incentives and tax benefits
for them,” the Minister underlined.
Besides, in an effort to integrate
the issue of environment in the tax
policy, the Government has further
reduced the corporate tax by 1
per cent for ‘Green’ readymade
garment factory owners from
2017-18 fiscal.
“In order to keep the earth
habitable for our next generation,
we need to ensure both sustainable
development and the conservation
of our environment. We plan to
integrate the environmental issues
in our tax policy. In line with
that, I propose to reduce the tax
rate of RMG companies to 14% if
their factories are internationally
recognized with green building
certification,” maintained the
Finance Minister. Design (LEED) certification
from the US Green Building
Council (USGBC), one of the top
green building rating systems in
the world.
According to Bangladesh Garment
Manufacturers and Exporters
Association (BGMEA), since 2011,
a total of 67 Bangladeshi RMG
factories have received Leadership
in Energy and Environmental Of the 67 factories, 13 have been
rated Platinum, 20 Gold and 5 Silver.
At least 222 more factories have
been registered with the USGBC
for the LEED certification, as
per reports.
BGMEA for complete withdrawal of Tax at Source
for next 2 years
Bangladesh Garment
Manufacturers and Exporters
Association (BGMEA) has
demanded full withdrawal of
Tax at Source for next two years
after the 1 per cent tax that
was recently proposed by the
Government in the Budget for the
2017-18 fiscal.
The apex trade body of the
country’s garment industry made
the demand in a post-Budget
press conference at the BGMEA
Building in Karwan Bazar of
Dhaka recently.
“Country’s apparel industry
is passing through an adverse
situation and full removal of
tax at source for at least two
years is needed to overcome
us.” The BGMEA President added
that the new tax will make the
business in this sector tougher
to operate and attain the desired
growth and as such requested
the Government to fix the tax at
source at zero per cent for the
next two fiscals.
the scenario,” said BGMEA
President M Siddiqur Rahman at
the press meet. Referring to
BGMEA’s proposal pertaining
to tax at source, he said, “Tax
at source was not removed or
36 Apparel Online Bangladesh | JULY 2017 | www.apparelresources.com
even reduced. Rather it has
been increased to 1 per cent
from the existing 0.70 per
cent, fixed especially for the
readymade garment sector,
which is totally frustrating for
Appreciating the move to set the
Corporate Tax rate at 15 per
cent from the existing 20 per
cent, BGMEA leaders further
requested the Government to
reduce the same to 10 per cent
for the next five years. They
also sought additional 5 per cent
cash assistance alongside the
existing facilities on Freight On
Board (FOB) price for readymade
garment exports.