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The tax rate should be reduced and the tax net should be expanded instead, Prime Minister’s adviser Salman F Rahman said, urging businesspeople to cooperate with the revenue regulator to expand the tax net further.
He urged the businessmen to gradually come out of the culture of seeking incentives or subsidies.
Salman F Rahman, adviser for private industry and investment to the Prime Minister, made the remarks while speaking at the inauguration ceremony of the 18th Dhaka International Textile and Garment Machinery Exhibition (DTG)-2024 as the chief guest on Thursday.
The fair is being held at the International Convention City Bashundhara (ICCB) in the capital from February 1 to 4.
The expo is being jointly organised by the Bangladesh Textile Mills Association (BTMA) and Yorkers Trade and Marketing Service Co.
This year, 1,100 companies from 33 countries are showcasing their products in 1,600 stalls.
Last year, 1,200 companies from 36 countries with the same number of stalls participated in the 17th version of the DTG.
The exhibition aims to introduce local entrepreneurs to cutting-edge machinery and technological advancement in the field of textile.
He also lamented the present tax-GDP ratio of the country, saying Bangladesh has one of lowest tax-GDP ratios in the world, even less than Pakistan.
“The tax rate should be cut, but the tax net should be expanded further in order to help the government support the development of trade and business,” he suggested.
He said that he held talks with the finance minister about the government’s decision to gradually phase out incentives given to export-oriented sectors. “I have shared your (exporters’) concern with the minister,” he said.
“The finance minister, in response, invited the fashion industry leaders to meet him to discuss the issue,” Mr Rahman added.
He also said that there is pressure (from buyers) to export green products.
He emphasised the need for moving fast towards using manmade fibres to gear up exports further.
“Despite being the 2nd largest exporter, we use about 90 per cent of natural cotton, while globally, 70 per cent of fashion goods are made from manmade fibres,” he said.
He acknowledged the prevailing power and gas crisis in the country despite a price hike. It, however, would take time to improve the situation, he said.
Special guest Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), urged Chinese companies to invest more in Bangladesh, mentioning that there is a US$8.0 billion apparel market in the country to invest in.
The government’s decision of intensive cut has added woes to the prevailing power and electricity crisis, alleged other speakers.
If those problems are not solved properly, the country would face a fresh economic recession, they feared.
Mohammad Ali Khokon, president of BTMA, said that qualitative changes in clothing have already opened up various avenues and provided enormous opportunities for market development and grabbing new markets as well.
“This could only be possible through the introduction of state-of-the-art technology in our production process for our main objective to hold such exposition,” he added.