Bangladesh garment makers have sought full waiver of source tax on export receipts for three years, claiming the initiative would help them reach $50 bn in shipments by 2021. Tax authorities now collect 0.70 per cent tax on total export proceeds from major export items including garments.
The next budget would be worth taka 400,000 cr, there would be no big impact if the source tax is not collected from garment exporters considering the sector’s contribution to direct and indirect job creation.
Garment shipments rose 9 per cent year-on-year to $22.83 bn in the first nine months of the current fiscal, according to official data. The garment industry also demanded a reduction of corporate tax to 10 per cent for all exporters from the current rate of 12 per cent.
Bangladesh is now concentrating on signing FTAs as it is slated to graduate out of the least developed countries (LDCs). The country will also sign FTAs with Cambodia and Sri Lanka by the end of this year and is also considering similar agreements with some other nations.
Bangladesh has requested Thailand to consider a free trade agreement (FTA) to encourage bilateral trade. The Commerce Minister also invited Thai entrepreneurs to invest in Bangladesh. The country is willing to provide a special economic zone as well as business facilities to foreign investors. These FTAs will be very important for future growth of Bangladesh garment export industry.