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Bangladesh NBR wants to hike tax on RMG sector
Jun '12
Bangladesh’s National Board of Revenue (NBR) has proposed to increase tax on the country’s readymade garment (RMG) sector to make the rate equal to that paid by other sectors in due course of time.
Last year, Bangladesh exported apparels worth US$ 18 billion, accounting for nearly 75 percent of the country’s overall exports. However, the clothing sector’s contribution to the nation’s exchequer is low compared to other sectors, as the garment sector enjoys modest tax rates.
In the 1980s, the Government had granted a tax-exempt status to Bangladesh’s garment industry in order to strengthen the sector. The tax-exempt status remained in place for two decades until a small tax of 0.25 percent on export receipts was levied in fiscal year 2004-05.
Subsequently, the tax was raised to 0.4 percent in fiscal 2010-11 and currently the apparel sector pays 0.6 percent tax.
The Government is now planning to increase the tax on garment exports to 1.2 percent in fiscal 2012-13 that begins on July 1. 2012.
There are over 5,000 RMG manufacturing units in Bangladesh employing more than 3.5 million people.

Fibre2fashion News Desk - India

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