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BTMA seeks roll back of 1.2% tax at source

19
Jun '12
Mr. Jahangir Alamin
Stating that the increased tax at source could further intensify the liquidity crisis and hinder imports and exports, Bangladesh Textile Mills Association (BTMA), the representative body of primary textile producers in Bangladesh, has urged the Government to roll back the proposal.
 
In his Budget 2012-13 speech, Finance Minister AMA Muhith proposed increasing tax at source on apparel exports from existing 0.70 percent to 1.2 percent, and reduce five percent tax on cash incentive.
 
BTMA President Jahangir Alamin said Bangladesh’s garment industry is in danger considering the present domestic as well as international business conditions.
 
Mr. Alamin said the Budget incorporates some positive proposals like rectifying HS code of polyester staple fibre, exempting rented industry space and domestically procured cotton from Value Added Tax (VAT) and duty-free import of ETP machinery. However, he apprehended that these proposals may fail to deliver any great positive result because of the tax hike proposal.
 
He added that garment exports are already waning in the wake of global economic slump, and fixing tax at source for all products at 1.2 percent would further impede apparel sector’s export growth.
 
This may compel garment manufacturers to obtain high interest loans to overcome the adversities arising out of the proposed tax hike, Mr. Alamin said. 
 
Compared to the prevailing rates, the proposed rise in the tax at source is a 72 percent hike, which is impractical for the export-oriented industry, Mr. Alamin said, and urged the Government to exempt the primary textile sector from tax net.
 
Further, explaining that income of the exporters is subject to a 15 percent tax, he called on the Government to roll back the levy of 1.2 percent tax at source against each export document.
 

Fibre2fashion News Desk - India


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