Home / Knowledge / News / Textiles / China's textiles & garment sector seeks tax reform
China's textiles & garment sector seeks tax reform
22
Jul '11
China's textiles and garment sector has sought nation-wide structural tax reform to counter the growing competition from Bangladesh.

Industry experts suggest a reduction in drawback duty on fabrics, and increase in drawback duty on garments.

The sudden rise of Bangladesh garment industry is posing a stiff competition to the traditional labour-intensive Chinese garment industry, which is under pressure due to shortage of workers, increasing costs of raw materials, international trade restrictions, and even the appreciating Yuan.

Bangladesh, on the other hand, has a large number of working population, its people are well-versed in English, and the minimum wage set by the Government of Bangladesh for the textiles and garment industry is very low at 1662 taka, i.e. about 180 Yuan.

The Bangladesh Government is also attracting foreign investment by giving tax incentives. While the normal income tax rate in the country is very high at 37.5 percent, foreign investors are exempt from it for at least the first five years.

If the investment is made in garment units inside the export processing zones (EPZs), then the foreign investor can enjoy income tax waiver for ten years, while those investing outside the EPZs can have 5-7 years waiver.

The relaxation in EU Rules of Origin (RoO) since beginning of 2011 has also worked in Bangladesh's favour as garments made from imported fabrics also enjoy duty-free access to the EU market.

In such a situation, experts foresee China losing its competitive advantage to Bangladesh in the next 3-5 years, unless structural tax reforms are implemented.

At present, textiles and garments are allowed a 16 percent concession in China. If the drawback is increased on garments and reduced on fabrics, it will decrease the cost of garments while increasing the cost of fabrics, experts say.

This step would be enough to contain competition form Bangladeshi garment industry. Since, Bangladesh heavily relies on import of Chinese fabrics for its garment manufacturing, the increase in the cost of Chinese fabrics would make their garments costlier, they add.

Fibre2fashion News Desk - China


Must ReadView All

Israeli minister announces tax cuts on consumer goods

Apparel/Garments | On 14th Dec 2017

Israeli minister announces tax cuts on consumer goods

The Israeli Government will slash taxes by $227 million, finance...

Courtesy: Kelvin Techstyles

Apparel/Garments | On 14th Dec 2017

Kelvin Techstyles fuses style and function in city apparel

Fusing style and function in outdoor clothing, Roseville,...

India’s WPI inflation for textiles up 0.3% in Nov 2017

Textiles | On 14th Dec 2017

India’s WPI inflation for textiles up 0.3% in Nov 2017

India’s annual rate of inflation, based on monthly wholesale price...

Interviews View All

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Nitin Bhatia
Trend Arrest

Setting up a brand for online selling is easy, but running the brand is not

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search