Bangladesh’s garment industry wants full withdrawal of source tax and additional five per cent cash incentives for the next two years.

It also wants the corporate tax to be reduced to ten per cent from the proposed 15 per cent. It feels imposition of such a tax burden on the industry is not appropriate and would hamper its growth.

The existing source tax on garment exports is 0.7 per cent for the current fiscal year. The proposal is to make it one per cent from the next fiscal.

Other points made by the industry include additional five per cent cash incentives on freight on board price.

The garment industry is Bangladesh’s largest manufacturing industry. The sector has been facing various challenges including currency devaluation in major markets, decline in global demand for garments, ongoing safety initiatives and increasing cost of doing business.

The budget for fiscal year 2017-18 proposes reducing corporate tax to 15 per cent and a further cut of one per cent to 14 per cent for readymade garment companies having internationally recognised green building certification from the existing 20 per cent. Bangladesh has a target of achieving 7.4 per cent economic growth in the new fiscal year.