Its President Siddiqur Rahman also told a press conference at the BGMEA Building in Karwan Bazar on Sunday that the budget was not ‘welcoming’ for the RMG industry.
Describing the hurdles the apparel industry is facing now, he proposed withdrawing tax at source for the sector for two fiscal years and cutting corporate tax to 10 percent for the next five years.
Finance Minister AMA Muhith has proposed to cut corporate tax from 20 percent to 15 percent in the budget for fiscal 2017-18. The tax at source, however, is rising from 0.7 percent to 1 percent.
“From what we’ve seen, we can’t say that this budget is well-disposed to the readymade garment industry. But there is still time. Please fulfil our demands within the time so that we can describe it as friendly to the RMG sector,” Siddiqur urged the government.
Before Muhith presented the budget on June 1, the BGMEA had also demanded extra 5 percent incentives for BGMEA and BKMEA and adoption of a stable revenue policy to encourage investors.
On Sunday, Siddiqur claimed that production cost had risen 18 percent due to the devaluation of euro, Britain’s exit from the European Union, gas crisis, and various other reasons.
“That’s why the tax at source needs to be withdrawn for the next two fiscals. We also demand the 20 percent corporate tax be halved," he said.
He also said the extra 5 percent incentives for the RMG entrepreneurs were needed to help them enter new markets.
According to him, the growth in exports to new markets in clothing sector was 1.21 percent in past 10 months. The growth was 15 to 20 percent last year, he said.
The $28 billion RMG sector contributes to around 80 percent of Bangladesh's total export.
