RMG export: NBR may phase out lower corporate tax

The National Board of Revenue (NBR) is considering phasing out reduced corporate tax rates for apparel exporters as the benefits have remained in place for a longer period of time.

In the budget for the upcoming fiscal year, the tax authorities may increase tax rates for most of the sectors, including ready-made garment exporters, who are enjoying reduced rates.

Currently, RMG exporters are enjoying 10-per cent corporate tax rate for green industries and 12 per cent for general ones.

The reduced tax rate is set to continue until 30 June 2028.

However, a majority of the corporate taxpayer pay taxes at a rate of 27.50 per cent on their income.

According to a senior income tax member, the NBR has planned to phase out all reduced rates, but it is indecisive about RMG following Trump's higher tariff hike on Bangladeshi products.

The plan to cut tax expenditure in the upcoming fiscal would be submitted to the finance adviser for his consent, he told the FE.

Meanwhile, tax officials said the source tax rate of 1.0 per cent was adjusted with the payable corporate tax of the RMG exporters.

In most cases, the exporters do not require paying additional taxes after adjustment with the source tax paid at import stage.

In case of increased corporate tax rates, they may have to pay some extra taxes after payment of source tax, according to the officials.

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