Bangla textile, garment bodies seek 4% cash incentive

09 Jul '20

2 min read

Pic: Shutterstock

The Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association, the Bangladesh Textile Mills Association and the Exporters Association of Bangladesh recently wrote a joint letter to the finance ministry demanding a 4 per cent cash incentive to exporters against their repatriation of export proceeds instead of value addition.

They also urged issuance of a master circular on the cash incentive, saying exporters are being harassed due to the ambiguity in the existing circular in this regard, according to Bangla media reports. Knitwear exporters get a 4 per cent alternative cash incentive at present against value addition to their products produced in the country using local yarn.

The letter said currently the cash incentive is being calculated on 80 per cent of their repatriated export proceeds and exporters get highest 3.2 per cent incentive.

Cash incentive could be offered against freight on board instead of value addition as there is no realistic methodology for determining value addition to products, the trade bodies said.

Besides, the issue is quite technical as the charges for knitting and dyeing are not the same. Terming the audit system in giving cash incentive 'more complex', they also alleged that they face a wide range of harassment because of the audit system.

Exporters need six months to one year, in some cases, more than one year to get incentive certification, they said, adding an additional six months to a year pass before incentive claims are sent to the central bank with certification.

Fibre2Fashion News Desk (DS)

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