Export sectors demand equal fiscal benefits

The country's export sectors sought Monday equal treatment in case of fiscal and other benefits in the forthcoming budget to promote diversification.

Leaders of the sectors said there are some reduced tax benefits for the readymade garment industry, including corporate and source tax rates, which are not offered for other sectors.

Corporate tax rate for the apparel industry is 12 per cent and source tax 0.25 per cent, but jute exporters have to pay 0.60 per cent source tax on export-proceeds and corporate tax rate for some export-oriented sectors is still 15 per cent to 35 per cent.

Speaking at a pre-budget meeting with the National Board of Revenue (NBR) on its premises, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Siddiqur Rahman expressed solidarity with the demand.

He said all export-oriented sectors should enjoy equal facility without any discrimination.

The NBR held the pre-budget meeting with associations of the export-oriented sectors, including the BGMEA, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Bangladesh Textiles Mills Association (BTMA), the Bangladesh Jute Mills Association (BJMA).

Other bodies were the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), the Bangladesh Terri Towel and Linen Manufacturers and Exporters Association (BTTLMEA), Dying and Printing Association, the Bangladesh Textile Dying and Printing Industries Association (BTDPIA), the Bangladesh Garments Accessories and Packaging Manufacturers & Exporters Association (BGAPMEA).

In the meeting, the BGMEA president sought a long-term fiscal policy for all export-oriented sectors to minimise the scope for raising tax rates every year.

He demanded that the Board make 0.25 source tax for export-oriented sector a 'final settlement'.

"The exporters may face harassment for not having the provision as taxmen will be able to claim additional tax from export proceeds," he said.

He also identified high interest rate of bank loans and bad loans as operational barriers to genuine businesses.

He also sought the reduction of corporate tax rate to 10 per cent, withdrawal of VAT and stamp duty on RMG export.

BPGMEA president Md Jashim Uddin said equal tax treatment is necessary for export-diversification.

"Corporate tax rate at 12 per cent should be offered to all export-oriented sectors," he said.

The NBR should provide tax benefits to small and potential exporters similar to the apparel industry to help the sectors grow, he said.

BTMA president Mohammad Ali Khokon demanded the extension of reduced corporate tax benefit to the textile sector and bring it down to 12 like that of the apparel sector.

Currently the textile sector enjoys corporate tax at a reduced rate of 15 per cent and tenure of the facility is scheduled to expire June, 2019.

BGAPMEA president Abdul Kader Khan demanded a long-term source tax benefit at rate of 0.25 per cent on export proceeds for five years.

BJMA secretary general A Barik Khan demanded the reduction of source tax on export proceeds to 0.25 per cent for jute exporters from the current 0.60 per cent.

Responding to the demands, NBR chairman Md Mosharraf Hossain Bhuiyan said that they would scrutinise the proposals during the budget preparation.

He, however, agreed that all exporters should enjoy equal facility.

On the abuse of bonded warehouse facility, he urged the businesses to play a role in prevention of leakage of goods imported without duty payment.

He said in future only exporters would be provided bond licences.

He said Bangladesh is the fifth largest source of remittance earnings of India, but the NBR does get much tax from foreigners.

He requested employers to provide the actual information related to the number of foreign employees and their salary so that the NBR could collect proper amount of income tax from them.

In the meeting, exporters also sought removal of a provision of the Income Tax Ordinance-1984, which says that employers should provide information related to tax compliance of their employees.