Following the implementation of the new minimum wage in December and reported clamour from garment makers for incentives in view of the same, the National Revenue Board (NBR) has reportedly agreed to review the industry’s proposal to cut source tax on export earning, claimed media reports.
As per the report, the country’s apex garment makers’ body the Bangladesh Garment Manufacturers and Exporters Association has reportedly sought reduction in the income tax at source on export proceeds from existing 0.60 per cent to 0.25 per as part of incentive package to implement the new minimum wage besides asking NBR to provide the benefit for five years instead of the current practice of lowering source tax yearly on adhoc basis.
It may be mentioned here that amidst falling profit margins and increasing overheads, the garment manufacturers have expressed fear of business profitability if the new minimum wage is implemented without any financial aid from the Government. Keeping in consideration the sentiments of the business community, Commerce Minister Tofail Ahmed in September reportedly maintained that his Government was mulling more benefits for the apparel sector to ensure that it could remain competitive in the global market following the increase in minimum wage.
As per the report NBR officials reportedly underlined that they were not in favour of a proposal of general exemption but, in most cases, agreed with such proposal in line with Government’s instruction.
NBR would reportedly take a call on this issue as per instructions received from the Government to this end.
It may be mentioned here that NBR in September this year slashed the tax to 0.60 per cent from 1 per cent reinstated in the budget for the current fiscal year 2018-2019.