Garment makers said on Friday the proposed 1.2 percent tax at source on exports will act as a major obstacle to expansion of the industry.
The current rate of the tax is 0.60 percent.
Given the current global and domestic business scenario, the profit of the garment business has also slashed down, said Shafiul Islam Mohiuddin, president of Bangladesh Garment Manufacturers and Exporters Association, in a budget reaction at his office.
Moreover, the garment export is also declining for global economic slowdown, he said adding fixing 1.2 percent tax at source for all export products will hamper the export growth of the country’s main foreign currency earning garment sector.
“We will have meetings with the finance minister and the prime minister demanding re-fixing of the rate in the greater interest of the export sector,” he said.
Fixing 1.2 percent tax at source on export will discourage the exporters and such a move also contradicts with the target of achieving 7.2 percent GDP growth and government’s labour intensive industrialisation.
However, he welcomed the government for proposing to introduce zero duty instead of the existing 1 percent for importing capital machinery in an effort to boost industries.