Garment accessory makers demand equal facilities proposed for RMG sector

Garment accessories makers have urged the government to provide them with equal budgetary facilities as proposed for the readymade garment (RMG) sector.

Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), in a budget reaction on Friday, expressed frustration as their demands for reducing corporate tax, source tax and providing cash incentive have not been addressed in the proposed budget for fiscal year 2020-21.

"Though the export-import, textile and industries policies mentioned about providing equal facilities to both direct and deemed exporters, we never get equal facilities," BGAPMEA President Abdul Kader Khan said in the statement.

The proposed budget has reduced corporate tax to 32.5 per cent from 35 per cent whereas the tax is 10 to 12 per cent for readymade garment industry, he said.

Accessories and packaging industry contribute 15 to 18 per cent of the country’s RMG export, he said.

Local accessories and packaging makers export their produced goods to other export oriented sectors including RMG through back to back letter of credit, he explained.

Almost all industrial sectors have received government’s stimulus package to offset the negative impact of corona virus outbreak, Mr Khan said.

‘But they did not get any support during the pandemic’, he added.

The government provided additional 1.0 per cent incentive to RMG sector which the budget has proposed to continue in the upcoming fiscal year.

“But we are never entitled to get any incentive,” he said.

"There is no announcement of cash incentive in the proposed budget or no assurance for the backward linkage industry of RMG," Mr Khan said, urging the government to provide equal incentive to the accessories and packaging makers to help the sector overcome the negative impact on ongoing Covid-19 pandemic.

The BGAPMEA also urged the government to fix source tax to 0.25 per cent from the proposed 0.5 per cent.   

He requested the government to reduce the corporate tax to 12 per cent as proposed for the RMG sector, considering their contribution to the export trade.

Some 1,700 small and medium accessories and packaging makers are meeting the requirements for 30 to 35 types of such items needed for the RMG exporters while contributing to help save a huge amount of foreign currency, he explained.

The trade body also demanded the government to provide equal budgetary facilities to the accessories and packaging makers as given to the direct exporters, taking the sub-sector's contribution to the export trade and economy.

The BGAPMEA also hailed the government to increase social safety net, creating employment opportunities and expanding financial support due to the Covid-19 pandemic.

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