Bangladesh exporters yearn for cut in tax at source on export earnings and cash incentives

Bangladesh exporters yearn for tax at source on export earnings and tax on cash incentives to be waived or cut down in the budget for fiscal year 2015-16 to make it uniform for all exporters, as it is not a profit of the exporters.

The exporters, textile mills, jute and plastic sectors proposed to the National Board of Revenue (NBR) to cut tax at source on export to 0.30 per cent from existing 0.60 per cent.

Currently, apparel exporters are enjoying 0.30 percent tax rates on export bill while others are paying 0.60 per cent

Bangladesh Textile Mills Association (BTMA) leaders urged the NBR to continue special income tax rate at 15 per cent for primary textile sectors including spinning, weaving, dying, printing and finishing mills. The reduced tax rate is scheduled to expire in June, 2015.

The BTMA also sought tax holiday facility for new investment in spinning, weaving and other factories under primary textile sector to encourage investment in the sector.

BTMA president Tapan Chowdhury sought policy support in the budget to recover from losses in businesses due to ongoing political impasse. He proposed waiver of 3.0 per cent tax at source on local letters of credit for supply of raw materials.

Bangladesh Jute Mills Association (BJMA) leaders proposed to the NBR to withdraw the provision of imposition of minimum tax on company and allow the sector to enjoy 15 per cent income tax.

Jute Goods Exporters Association leader S Ahmed Majumder said that the jute goods exporters are small and medium businesses which are facing difficulties to pay higher licence fees and 15 per cent VAT on it.

Jute Mills Association secretary A Borik Khan proposed to withdraw tax at source for export of jute products and cash incentives as the number of jute goods exporters declined to 323 from 500 due to financial crunch.

According to Terry towel and linen manufactures and exporters association director Shahadat Hossain, the sector is facing uneven competition in the export market. Some 48 industries out of 105 have faced closure so far.

The sector attained an average growth of 32 percent in the last decade which saw a decline in its export earnings. Addressing the situation, the association leaders proposed to waive tax on cash incentives, local L/Cs and set a reduced income tax rate of 10 per for the sector.