Muhith hints at raising tax at source for Bangladesh’s apparel export in next budget

Muhith hints at raising tax at source for Bangladesh’s apparel export in next budget

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Finance Minister AMA Muhith has hinted that tax at source for readymade garment (RMG) export might be increased in the next budget.At a pre-budget discussion in Dhaka on Friday, he said the government was also considering revising the ‘cash incentives’ provided to export sectors.Last year, the apparel export source tax was slashed by 0.5 percent to help the sector make up for losses it incurred during the 2013 political turmoil and after raising workers’ wages.The National Board of Revenue at the time had said the government counted Tk 25 billion in losses due to the move.Muhith at the programme organised by the BIDS said the source tax was slashed from 0.8 percent to 0.3 percent under ‘special circumstances’.“It’ll be a big jump if we can go back to the previous stage. It’d have been good,” he said. “However, it is not possible. Let’s see how much we can [increase the source tax].”Industry lobby BGMEA has been demanding the tax incentive be continued with for five years.Muhith also hinted cutting down cash incentives for exports.“We’ll review the cash incentive but not now,” he said. “We’ll do it after the budget.”Local textile industry gets 5 percent cash incentives. The amount, about Tk 13 billion, is almost half the total assistance the government provides to various sectors.

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