Owners of textile and readymade garment industries on Wednesday urged the government to withdraw the 1.5 per cent tax on export earning at source that has been proposed in the budget of FY2011-12.
They also demanded increase of the alternative cash incentive to 15 per cent from the existing five per cent for the export-oriented apparel sector.
The leaders of the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association and Bangladesh Textile Mills Association placed the demands at a joint press conference in Hotel Ruposhi Bangla, and later before finance minister AMA Muhith when they called on him at his secretariat office.
Muhith said that he had not given them any assurance that the government would meet the demands as other departments would have to be consulted before making a decision in this regard.
He, however, said that he would discuss the issue with the government.
'I have listened to their demands and commented on a few of them,' he told reporters after the meeting.
BTMA leaders told reporters at the press conference that the export-oriented garments and textile sectors have been worst affected by the proposed budget.
They demanded 15 per cent alternative cash incentive till 2015, immediate implementation of the announced stimulus package, export stimulus package for the small and medium enterprise sector, 'new market' stimulus package, 10 per cent rebate on electricity bill and withdrawal of 9 per cent
VAT on house rent.
The garment sector's leaders urged the government to reduce the price of furnace oil and fix it at Tk 22 per litre, and give the garment and textile sectors tax holiday and continue it till 2015.
BGMEA president M Shafiul Islam Mohiuddin read out a written statement at the press conference that contained their demands, with explanations, on behalf of the three bodies.
BKMEA president AKM Selim Osman, BTMA president Jahangir Alamin and other leaders were present on the occasion.
They said that the proposed 1.5 per cent income tax at source on exports will hinder the growth of the garment and textile sectors.
The garment and textile sectors are facing increasing risk factors, which are now as high as 30 to 35 per cent, due to the price-hike of raw materials, high bank interest, higher workers' wages and the increasing cost of doing business, they told reporters.
'If the government imposes 1.5 per cent tax at source, the risk factor will rise by 25 per cent and we won't be able to survive in the competitive global market,' they said.
They said that there was 5 per cent cash incentive support which could not help to offset the current difficulties in the textile sector, and demanded 15 per cent cash incentive for the next four years.
They said that the stimulus package announced by the government remains unimplemented for unknown reasons, and should be implemented without any further delay.
The entire apparel sector is the core industry of the country and it is also an organised sector, said Muhith, adding that the Cabinet members, especially the prime minister, are very much aware of the current problems facing that sector.
He said he would find out why no entrepreneurs have received the benefits of the announced stimulus package and export stimulus package for the SME sector.
He said that he would favourably consider the demand for reducing VAT and tax on polyester, viscose staple fibre, acrylic toe and tops, pet-chips and chips that will reduce dependence on cotton. 'We have already reduced the tax on polyester,' he added.
source:New Age
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