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BGMEA hails new budget for the FY2022-23

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in its reaction to the proposed budget for the FY2022-23– has hailed the new measures to boost the country’s main foreign currency earner.

BGMEA also noted that the source tax hike will make the situation difficult for the industry in the current global context.

In a statement, BGMEA said, “We hope the honorable PM and the Finance Minister will contemplate keeping the source tax in the garment industry at 0.5%. The industry will get respite in the current crisis if a 0.5% source tax on exports remains effective for the next 5 years.”

Figure: BGMEA noted that the source tax hike will make the situation difficult for the industry in the current global context.

The apex trade body of Bangladesh’s readymade garment (RMG) manufacturers, highlighted the following points:

  • VAT exemption has been granted against sub-contracts for export
  • Continuing the cash assistance
  • Corporate tax rate for textiles has been fixed at 15% till FY 2024-25
  • It has been proposed to reduce the VAT on yarn made from man-made fiber and other synthetic fibers from TK6 to TK 3 per kg
  • VAT exemption on polypropylene stamp fiber production and advance tax exemption on import of its required raw materials
  • Terephthalic Acid I Ethylene Glycol – needed for making Textile Grade Pet Chips – has been exempted from any pre-requisite Tax
  • Sewage Treatment Plant (STP) import duty has been reduced from 25% to 5%
  • It has been proposed to keep the service charges of Mobile Financial Services out of income tax
  • Workers Profit Participation Fund (WPPF) proposes to exempt employer donors from income tax
  • Tax exemptions for persons with disabilities or third genders were previously 10% or more than 100%, it has been simplified to 10% or 25%.
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