Ready-made garment (RMG) accessories and packaging manufacturers in Bangladesh believe that the proposed FY2021-22 budget does not meet their expectations.
Md Abdul Kader Khan, President, Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), says, the budget does not provide the accessories and packaging sector equal opportunities provided for direct and indirect exporters, like the textile and other industrial sectors.
As per a Dhaka Tribune Khanhad demanded that the government should reduce the corporate tax rate, halve the tax at the source of export, and withdraw the existing income tax on the purchase of raw materials for export from the local market.
Md Abdul Kader Khan had also proposed to fix the corporate tax at 10-12 per cent like other RMG-related and exporting sectors. But in the proposed budget, it has been reduced from 32.5 per cent to 30 per cent. To overcome the current financial crisis, BGAPMEAhas applied for a revised circular to fix the corporate tax at 12 per cent for green factories and 15 per cent for other factories.
BGAPMEA had also requested an exemption of VAT on products and services collected from the local market by the export-oriented industries and also requested for exemption from section 19 to encourage exports.
But the proposed budget did not reflect that which would discourage the packaging industry. However, this industry meets about 95 per cent of the packaging demand for the export-oriented RMG industries of the country, says Khan.
In response to the budget, BGAPMEA has called for a minimum 1 per cent export incentive in proportion to the hidden exports in the interest of keeping the garment accessories and packaging industry competitive.