Bowing down to the pressure from apparel exporters, the Bangladesh Government has asked the National Board of Revenue (NBR) to reduce tax on apparel exports.
In a letter issued last week, the Ministry of Finance has directed the NBR to lower the tax on apparel and textile exports from the existing 0.8 percent to 0.3 percent, reports Financial Express.
The garment manufacturers and exporters from the country will enjoy the benefit of the tax reduction till June 2015. The lowering of the tax would cost the NBR about Tk 10 billion in revenue.
Last Month, the Bangladesh Finance Minister AMA Muhith had announced the decision to lower the tax rate on apparel exports from 0.8 percent to 0.65 percent owing to the repeated demands from Bangladeshi ready-made garment (RMG) manufacturers.
However, the RMG manufacturers and exporters were disappointed with the rate and appealed to the Government to lower it further to 0.25 percent.
The Bangladesh apparel sector has been facing severe issues in recent months due to the political unrest and garment manufacturers of the country have stated that business had slowed down significantly due to severe disruptions in transportations.
During the first six months of the current fiscal year, the exports of ready-made garments from the country increased by 19.95 percent to US$ 11.932 billion, as per the latest data released by the Export Promotion Bureau (EPB) of Bangladesh.