Bangladesh Textile Mills Association (BTMA) on Saturday urged the government to retain the 30 per cent value addition requirement for the country’s readymade garment industry to help sustain its backward linkages and address post-graduation challenges.
"If the existing 30 per cent value addition condition is withdrawn for the import of raw materials against bank guarantees, the risk of misuse of bond facilities, irregularities and unfair competition in the market will increase," Showkat Aziz Russell, BTMA president, said.
Retaining this condition is also needed for the interest of post-LDC transition export capacity and protection of local industries, he said while addressing a post-budget press conference held at Gulshan Club in the city.
Textile millers' concern stems from a proposal in the national budget for FY2026-27 to remove the existing 30 per cent value-addition requirement for exporting goods manufactured from duty-free raw materials imported against bank guarantees without a bond licence.
The government has also proposed extending the facility to 10 new sectors in addition to the existing eight industries - including readymade garments, leather goods and plastics - allowing them to import raw materials against bank guarantees without obtaining a bond licence.
The measure has been proposed as part of efforts to expand export-oriented industries and diversify the country's export basket.
Responding to a question, the BTMA leader stated that there might be a threshold for value addition based on sectors, adding that all sectors' raw materials and other requirements are not equal.
The BTMA also demanded fixing the corporate tax rate for the primary textile sector at 10 per cent until 2030 from 27.5 per cent to encourage domestic and foreign investment, increase the competitiveness of the industry, and ensure fair taxation in the same value chain.
Considering the potential for export of man-made fibre-based ready-made garments, the BTMA also demanded withdrawal of the proposed 5.0 per cent import duty on polyester staple fibre.
Other demands included full withdrawal of tax at source on cash incentives.
In the budget, the income tax deduction rate against cash assistance has been reduced from 10 per cent to 5.0 per cent.