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Jun, 08 2018

Proposed Budget 2018-19 Declares Increase in Tax for RMG Manufacturers

The readymade garments industry is playing an important role in generating employment and fostering economic growth.

Proposed Budget 2018-19 Declares Increase in Tax for RMG Manufacturers

The certified green factory owners enjoy a 3 per cent rebate and pay 12 per cent, while publicly traded RMG manufacturers pay 12.5 per cent.

Finance minister AMA Muhith said, “If any taxpayer is a public limited company, the tax rate will be 12.5 per cent. Any garments factory having a green building certification shall enjoy a tax rate of 12 per cent.”

He also said the apparel sector has been enjoying various incentives and tax benefits such as the current withholding tax rate of 0.7 per cent on RMG exports.

Munhith said,the readymade garments industry is playing an important role in generating employment and fostering economic growth. Taking into consideration this fact, the readymade garments sector has been given special tax incentives.

President of Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), Siddiqur Rahman said, “The hike of 3 per cent in the corporate tax rate was not expected. We thought the corporate tax rate would be reduced, but it didn’t happen. We are expecting a reduction in the final budget.” 

He added, "This is not a good sign at all for the RMG industry”

The vice-president of the BGMEA and managing director of Evergreen Sweaters Ltd, Mohammed Nasir said, “We were expecting many facilities, but we don't see any reflection of this in the proposed budget.”

He also added, "We hope that the tax rate in the proposed budget would be refurbished soon."    

BGMEA sources say 67 Leadership in Energy and Environmental Design (LEED)-certified factories have been operating in Bangladesh. Among these, 13 have received platinum status, 20 gold status and 34 silver status.

According to the proposed Budget of FY2018–19, 100 per cent of export-oriented textile industries are getting duty exemptions on raw material imports and exemption of import duty is proposed for textile raw materials such as flax fibre and flax tow.   

“Besides skill development and employment generation, we are continuing our efforts, especially for ensuring congenial working environments in the readymade garments (RMG) industry. Safety evaluation work has been completed in 3,780 factories under the work plan formulated by the tripartite body comprising the International Labour Organisation, the Ministry of Labour and Manpower, and factory owners. In addition, a public accessibility database has been prepared, containing information of 3,743 export-oriented RMG factories. Also, creating a database with information of another 27,000 factories is under way. As a result, we have been able to consolidate our position in RMG exports.”

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