Readymade garment exporters' association Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has sent a letter to the finance ministry and National Board of Revenue for reviving 10 per cent reduced income tax rate facility for RMG industry for next 10 years. In a letter to finance minister AMA Muhith, the association demanded a retrospective approval of reduced income tax rate at 10 per cent since July 2014 as the facility ended in June 2014.

BGMEA President Md Siddiqur Rahman said that income tax paid by the RMG exporters on export earnings will be calculated at the regular 35 per cent from the current fiscal year 2015/16 as the special income tax facility at 10 per cent for the export-oriented garment companies expired in June 2014. ‘If the export earnings are calculated based on the income tax at 35 per cent entrepreneurs will have no fund for reinvestment,’ he said in the letter.

Till the last financial year of 2013/14, the tax at source for apparel item exporters was 0.80 per cent on their export which was considered as final settlement under some conditions, according to a statutory regulatory order issued by the NBR in 2005. The conditions include that the revenue board will calculate the annual income of RMG products exporting companies assuming that they paid tax at the rate of 10 per cent on export earnings while their other income will be taxed at the regular rate for companies at 35 per cent.

On the other hand, NBR officials are of the opinion that RMG exporters could show income from export earnings several times than actual ones taking the advantage of the special tax calculation facility under which, from 2005 to June, 2014, taxmen calculated tax at an estimated 10 per cent at the annual tax assessment though exporters paid tax at the rate of 0.80 per cent.

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