Bangladesh likely to keep Source Tax unchanged for apparel industry
Bangladesh’s National Board of Revenue (NBR) has hinted of keeping the source tax unchanged for the country’s export sector, around 83% of which is occupied by the apparel industry. NBR Chairman Mosharraf Hossain Bhuiyan indicated this while speaking in a meeting with exportoriented business chambers and Economic Reporters’ Forum at NBR Auditorium, Dhaka, ahead of the upcoming budget preparation for 2018-19 fiscal.
During the discussion with Exporters’ Association of Bangladesh (EAB), the institution’s Senior Vice President Md Hatem said: “The prices of apparel items have gone down worldwide. Because of the falling prices, now, 80% of the companies are suffering losses, 10% are operating on break-even point, and the remaining 10% are profiting.” “At such a critical point, the tax at source is proving to be a real handful for business. You (NBR) need to fix the tax at source for export-oriented industries, including the apparel industry, for the next five years. This will help the entrepreneurs to formulate business policies,” he said. In response to such remarks, NBR Chairman Bhuiyan said that for the time being, they don’t have any plans to raise the tax at source. Since this will be the Government’s pre-election budget, there should not be many changes. The inflow of revenue from exports is lower than the amount of export. Some money is being kept abroad. Now, NBR is thinking that if it can impose source tax on master LC value. Among those present in the discussion were Rezaul Hassan, member of NBR’s VAT policy, Firoz Shah Alam, member of NBR’s Tax Policy, and Kanan Kumar, member of NBR’s Income Tax Policy. Other senior members of export-oriented business forums were also present. Currently, the tax at source for exports stands at 0.70%. However, the export-oriented industries, especially the garment manufacturing, have repeatedly urged the Government to withdraw the levy, citing it to be a major obstacle in the growth of the industry.