Nov 4, 2019
BGMEA seeks reduced export source tax from July 1
Nov 4, 2019
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently demanded that the source tax on export earnings at reduced rate come into effect retrospectively from July 1.
BGMEA president Rubana Huq wrote to the National Board of Revenue (NBR) after the board on October 21 slashed the tax for all exporters from 1 per cent to 0.25 per cent.
In her letter, Rubana said that apparel exporters would face financial losses as the NBR’s statutory regulatory order (SRO) did not offer the benefit with retrospective effect.
Earlier, readymade garment exporters enjoyed the benefit from July 1, she said.
Rubana also claimed that the cost of business operation increased by around 30 per cent due to continued fall in prices of export items in the international market, hike in workers’ wages and other adverse situation.
The reduced tax rate will remain effective up to June 30, 2020. Income tax wing of the NBR, however, is not in favour of offering the benefit from July 1 as it would cause a huge revenue loss as exporters would be able to adjust the tax paid between July 1 and October 20 at higher rate, according to a Bangladeshi newspaper report.
In three months (July-September) of the current fiscal year 2019-20, source tax on export earnings at 1 per cent stood at Tk 517 crore from the apparel sector.
Due to the reduction in the export tax, the revenue board will get at least Tk 2,000 crore less in tax from the apparel sector, which accounts for more than 83 per cent of the country’s total export earnings.
Copyright © 2021 Fibre2Fashion. All rights reserved.