Bangladesh cuts export tax on RMG manufacturers

Following hectic lobbying by apparel manufacturers, the Bangladesh Government recently reduced source tax on export earnings for readymade garments (RMG) and other export sectors to 0.6 per cent from the existing 1 per cent.

The corporate income tax rate for RMG manufacturers and exporters was also reduced to 12 per cent from 15 per cent.


Statutory regulatory orders were issued on September 6 by the National Board of Revenue in this regard. The benefits were given with retrospective effect from last July. The reduced tax rate will continue June next year, according to Bangladesh media reports.

The export tax rate was 0.7 per cent in fiscal 2017-2018, but was raised to 1 per cent in the last budget, which also raised the corporate income tax rate for RMG makers to 15 per cent from the earlier 12 per cent.

The corporate tax rate for green building certificate holding apparel companies has also been reduced to 10 per cent from 12 per cent.

Apparel exporters had complained about possible increase in their cost of production due to implementation of upcoming new wages for workers and also about stiff global competition. 

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