The Financial Express

Jute exporters at EPZs seek cash incentive

| Updated: September 23, 2019 11:43:35

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- Representational photo (Collected) - Representational photo (Collected)

The Bangladesh Export Processing Zones Authority (BEPZA) seeks to incentivise jute goods exporters operating at export processing zones (EPZs) to encourage export trade, officials said.

To ensure fair treatment of factories outside and within EPZs, it has sent a letter to finance ministry seeking the stimulus.

The same appeal has also been forwarded to commerce ministry.

A finance division official said, "We've received a BEPZA letter concerning cash incentive. We're now working on the issue."

BEPZA member (investment and promotion) Zillur Rahman explained in the letter why jute industries at EPZs should be incentivised.

"About 70 per cent of the fully foreign-owned 'Type A' and joint-venture 'Type B' companies within EPZs don't get cash incentives for jute goods exports."

Similarly, some 30 per cent of the fully locally-owned 'Type C' companies within EPZs are also not entitled to this facility, reads the letter.

For this, factories producing jute items under EPZs are falling behind others in export competence gradually, Mr Rahman mentioned.

According to the 'Foreign Private Investment (promotion and protection) Act 1980, "The government shall accord fair and equitable treatment to foreign private investment... in Bangladesh."

The government provides cash incentives for jute industries to help boost export earnings from the sector every fiscal year (FY).

According to a central bank circular, jute yarn, hessian and diversified jute goods exporters get 7.0 per cent, 12 per cent and 20 per cent cash incentives respectively.

But the government keeps all factories under EPZs out of such incentive facility.

A total of $5.05-billion real investment has been made at EPZs under BEPZA until August 2019.

Some $7.5-billion export earnings were achieved through the industries at EPZs in FY 2018-19.

It was 19 per cent of the total national export earnings.

An estimated 0.54 million Bangladeshis are working for 461 industries under BEPZA. Of the employees, about 66 per cent are female.

On the other hand, the industries spend Tk 84.25 billion for wages and allowances annually.

Taking into account the large volume of export earnings and job creation at EPZs, a source said, the government should incentivise jute goods exports.

"BEPZA under the Prime Minister's Office has been contributing to promoting, attracting and facilitating foreign investment at EPZs."

"It has also been contributing to earning a significant amount of foreign currencies alongside generating huge employments."

There are eight EPZs under BEPZA. They are Chittagong EPZ, Dhaka EPZ, Mongla EPZ, Iswardi EPZ, Cumilla EPZ, Uttara EPZ, Adamjee EPZ and Karnaphuli EPZ.

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