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8 June, 2018 00:00 00 AM
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RMG manufacturers miffed by increase in corporate tax

Sharif Ahmed
RMG manufacturers miffed by increase in corporate tax
The file photo shows employees busy working at a readymade garment factory in the capital. NDEPENDENT PHOTO

Ready-made garments (RMG) manufacturers will have to pay a higher corporate tax as the government has proposed to raise the tax rate from 12 per cent to 15 per cent for the 2018-19 fiscal years.   

However, certified green factory owners will enjoy a 3 per cent rebate and pay 12 per cent, while publicly traded RMG manufacturers will have to pay 12.5 per cent.

“If any taxpayer is a public limited company, the tax rate will be 12.5 per cent. Any garments factory having a green building certification shall enjoy a tax rate of 12 per cent,” said finance minister AMA Muhith while placing the budget in Jatiya Sangsad yesterday (Thursday).

He also said the apparel sector has been enjoying various incentives and tax benefits such as the current withholding tax rate of 0.7 per cent on RMG exports.

The readymade garments industry is playing an important role in generating employment and fostering economic growth. Taking into consideration this fact, the readymade garments sector has been given special tax incentives, said Muhith.

Siddiqur Rahman, president of Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), told The Independent: “The hike of 3 per cent in the corporate tax rate was not expected. We thought the corporate tax rate would be reduced, but it didn’t happen. We are expecting a reduction in the final budget.”      

When asked, Rahman said that at present a certified green factory pays 10 per cent tax, which will be increased to 12 per cent. "This is not a good sign at all for the RMG industry," he added.

Mohammed Nasir, vice-president of the BGMEA and managing director of Evergreen Sweaters Ltd, told The Independent: “We were expecting many facilities, but we don't see any reflection of this in the proposed budget.”

"We hope that the tax rate in the proposed budget would be refurbished soon," he said.    

According to BGMEA sources, 67 Leadership in Energy and Environmental Design (LEED)-certified factories have been operating in Bangladesh. Among these, 13 have received platinum status, 20 gold status and 34 silver status.

In the proposed Budget of FY2018–19, 100 per cent export-oriented textile industry is getting duty exemptions on raw material imports. Exemption of import duty is proposed for textile raw materials such as flax fibre and flax tow.    

“Besides skill development and employment generation, we are continuing our efforts, especially for ensuring congenial working environments in the readymade garments (RMG) industry. Safety evaluation work has been completed in 3,780 factories under the work plan formulated by the tripartite body comprising the International Labour Organisation, the Ministry of Labour and Manpower, and factory owners. In addition, a public accessibility database has been prepared, containing information of 3,743 export-oriented RMG factories. Also, creating a database with information of another 27,000 factories is under way. As a result, we have been able to consolidate our position in RMG exports.”

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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