Bangladesh’s National Board of Revenue recently exempted four services of the export-oriented readymade garment (RMG) sector from value-added tax (VAT). The services are expenditure for workers welfare and entertainment, laboratory test fee, information technology (IT)-enabled services and rent-a-car facility. VAT ranged from 5-15 per cent for the services.
The decision followed demands from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) for VAT exemption for all types of services, according to a report.
Excluding the four new services, apparel makers since 2005 have been enjoying 100 per cent VAT exemption for 13 types of services including supply of goods and services, security, transport contractors and port services, and partial exemption up to 80 per cent for another three types of services—electricity, water and natural gas bills.