Apparel exporters demanded 5 per cent cash incentive on their export receipts due to the rising costs amid implementation of a new salary structure in the industry. At present, garment shipments to new markets — which are destinations other than the US, the EU and Canada — and the use of local yarn yield 4 per cent cash incentives. But now, the apparel and textile makers have demanded 5 per cent cash incentives for all export shipments for the next five years.
The ongoing trade war between the US and China and the suspension of trade benefits by the US for Turkey have created good opportunities for Bangladesh’s garment sector, Rubana Huq, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said at a joint press conference on the upcoming national budget. If the opportunities are to be utilised, the exporters need a helping hand from the government, she said.
Leaders of the Bangladesh Textile Mills Association (BTMA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Exporters Association of Bangladesh (EAB) were present at the press conference. Huq demanded an extra Tk 5 in exchange rate of US dollar for garment export receipts as it may boost shipments by 6 per cent.
She also called for keeping all kinds of purchases for export purposes out of the purview of VAT, corporate tax cuts for garment companies from 12 per cent to 10 per cent and duty-free import of all kinds of safety equipment. The BGMEA Chief urged the government to carry forward the source tax of 0.25 per cent on export receipts in the next budget. Some exporters’ loans should be rescheduled for a longer time frame as they are facing challenges in running their factories. “Such a move will create more job opportunities as small and medium enterprises will be able to rerun their units.” She also suggested forming an emergency fund of Tk 300 cr to help the small and medium factories.
Mohammad Ali Khokon, President of the BTMA, urged the government to give 16 per cent cash incentives on apparel exports to the US markets as Bangladeshi product face 15.62 per cent duty there. “High duty to the US erodes our competitiveness,” he said, while also calling for a 10 per cent corporate tax rate for textile companies. Mohammed Hatem, Senior Vice President of the EAB, urged the government to simplify the process for getting cash incentives. “Exporters have to face a lot of difficulties in receiving the incentive money,” he said. Mansoor Ahmed, first Vice-President of BKMEA, also spoke.