Country's apparel sector leaders on Thursday urged the National Board of Revenue (NBR) to make customs, VAT, bonds, and tax-related processes faster, easier and hassle-free to facilitate sustainable industry development, aiming to achieve the target of $100 billion from garment exports by 2030.
They proposed reducing the tax at source applicable to the garment industry from 1% to 0.5% to mitigate the increased costs of doing business and maintain competitiveness. The views came up at a joint meeting of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). The meeting to discussed the current pressing issues of the ready-made garment (RMG) industry, while they expressed optimism that their demands would be considered in the upcoming budget.
BGMEA President S. M. Mannan (Kochi) presided over the meeting held at BGMEA Complex on May 8. The meeting was attended by BKMEA Executive President Mohammad Hatem, BTMA President Mohammad Ali Khokon, FBCCI Vice President Md. Munir Hossain, BGMEA Vice President (Finance) Md. Nasir Uddin, Vice President Abdullah Hil Rakib, Directors Md. Imranur Rahman, Mohammad Sohel Sadat, Shams Mahmud, Rajiv Chowdhury, Md. Jakir Hossain, and Md. Rezaul Alam (Miru). During the meeting, various issues of the garment industry were discussed, especially focusing on two circulars recently issued by the Bangladesh Bank. These circulars stated that no electricity and gas connections would be provided to new factories if they are established outside the government-designated economic zones or industrial areas.
Moreover, banks were directed to ensure mandatory clearance certificates from utility service providers before approving loans.
The leaders expressed concern that the garment industry is at a crossroads due to the current geopolitical crisis that is causing disruptions in global trade. They emphasized that the implementation of the circulars would exacerbate the crisis of the garment industry, hindering its growth and discouraging entrepreneurs from setting up new factories.
They highlighted that many garment factories established outside the designated economic zones or areas are undergoing expansion, and new factories are under construction. Therefore, implementing the circulars at this point would disrupt ongoing expansion works and new establishment efforts.
The leaders urged the government to exempt the garment industry from the circulars for at least five years and reiterated the demand for uninterrupted power and gas supply.
The issues related to customs, VAT, and income tax in the garment industry were also discussed in the meeting.
The leaders also discussed Bangladesh's graduation from the Least Developed Country (LDC) status and possible strategies to retain competitiveness in the post-graduation era. They emphasized the need for necessary policy support to attract increased investment in promising sectors for overall economic benefits.
