Reduction of corporate tax from the current 20 per cent to 15 per cent for the country’s readymade garment export sector has been proposed in Budget 2017-18 presented in Bangladeshi parliament. For readymade garment companies possessing internationally recognised green building certification, the Budget proposes reduction of tax rate to 14 per cent.

“Readymade garments sector is playing a vital role in the economic development and employment generation of the country. This sector is under manifold pressure due to adversities in the international market and claiming cash incentives along with withdrawal of withholding tax. Considering the contribution of this sector in the economic growth and employment generation, we have been providing various incentives and tax benefits for them. Withholding tax rate on readymade garments export is currently 0.70 percent and they are enjoying reduced corporate tax rate of 20 percent. I propose to reduce the corporate tax rate to 15 percent for this sector,” finance minister AMA Muhith said in his Budget Speech.

Stating that the government plans to integrate the issue of environment in its tax policy, Muhith said, he proposes to “reduce the tax rate of a readymade garments company to 14 percent if the factory of such company has an internationally recognised green building certification.”

To encourage employment of more women in the readymade garment sector, the government will continue its efforts to expand the sector together with improving its working environment, he said. (RKS)

Fibre2Fashion News Desk – India

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