The National Board of Revenue (NBR), Government of Bangladesh has issued a Statutory Regulatory Order (SRO) this week slashing the tax at source on all readymade garments by 0.5 percent, Dhaka Tribune reported.
As a result of the NBR’s decision, export-oriented knitwear and woven garments, terry towel and clothing accessories will have to pay 0.3 percent tax from the export proceeds, compared to the earlier 0.8 percent tax, the report said.
The relaxed tax will be applicable till June 2015, as per the SRO.
The decision of the Government to reduce the tax was taken by the Government as a special incentive to compensate garment exporters, who incurred heavy losses during the political unrest that prevailed in the country prior to the January 5, 2014 polls.
With the presence of more than 5,000 garment factories that together employ nearly 4.2 million workers, Bangladesh is currently the second-largest garment exporter in the world, next only to China.
During July-March 2013-14, the exports of readymade garments from Bangladesh increased by 15.15 percent to US$ 18.052 billion, as against exports of $15.676 billion made during the corresponding period of the previous fiscal, as per the data from the Export Promotion Bureau (EPB).