Bangladesh to cut corporate tax for RMG sector by 15%

03 Jun '16

2 min read

The Bangladeshi government has proposed to reduce corporate tax to 20 per cent from the existing 35 per cent for the country's export-oriented readymade garment industry.

“As part of our continued support, I propose to reduce the tax rate of the RMG sector from 35 per cent to 20 per cent,” said Finance Minister Abdul Muhith in his budget speech on Thursday.

The Finance Minister acknowledged that the RMG sector is one of the main exporting sectors of Bangladesh. This sector is making important contribution to the GDP growth and employment generation.

Muhith said during July-April of current fiscal year, Bangladesh's garment export earnings stood at $27.6 billion compared to $25.3 billion during the same period of the last fiscal year.

Export earnings from woven garments and knitwear recorded an increase of 12.7 and 7.3 percent respectively. Notably, among the main export markets, exports to both the USA and Euro zone have increased.

Referring to the textile sector, Muhith said ,“This sector has developed as a big and strong backward sector. Addressing its demand as well as to help it to move forward, duty on stripping chemical is proposed to be reduced to 15 per cent from the existing 25 per cent. Duty of flax fiber and spandex/elastraometrics applicable now at 10 per cent, is proposed to be reduced to 5 per cent.”

Muhith said the government is providing “substantial tax benefits” to the apparel sector acknowledging its contribution to the economy. (SH)

Fibre2Fashion News Desk – India

More Apparel/Garments News - Bangladesh...