The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the government to withdraw tax at source for the readymade garment (RMG) industry for the next two financial years. The association has also demanded the government to cut corporate tax to 10 per cent from the proposed rate of 15 per cent for the next five years.

Reduction of corporate tax from the current 20 per cent to 15 per cent for the country’s readymade garment export sector has been proposed in Bangladesh's Budget 2017-18 that was presented on June 1.

For readymade garment companies possessing internationally recognised green building certification, the Budget proposes reduction of tax rate to 14 per cent. As for the tax at source, it has been increased from 0.7 per cent to 1 per cent.

Terming the budget as not welcoming for the RMG industry, Siddiqur Rahman, president of BGMEA said at a press conference that it has not fulfilled the justified demands of the industry.

BGMEA had also asked for additional 5 per cent incentives for the members of BGMEA and BKMEA before the Budget was announced. A stable revenue policy was also demanded to encourage investors.

The devaluation of Euro, Brexit, gas crisis and more have resulted in production costs rising by 18 per cent, said Rahman. This is the reason why the association is demanding the withdrawal of tax at source.

The RMG sector of Bangladesh is worth $28 billion and contributes close to 80 per cent to the total exports of the country.