In a letter to the finance minister, Bangladesh exporters have once again urged the government to maintain advance source tax on export proceeds at 0.50 per cent for the next five years instead of raising it to 1 per cent as proposed in the national budget for fiscal 2022-23. Signed by the representatives of BGMEA, BKMEA and Exporters Association of Bangladesh, the letter warned, any increase in tax rate, especially at a time when the cost of production has surged, might have a negative impact on exporters’ working capital, reducing their competitiveness in global market.
However, Ahsan H Mansur, Executive Director, Policy Research Institute opines, the increase in source tax is reasonable as exporters are earning more due to the recent depreciation the local currency, and besides, the government is offering incentives for exports, he adds. Latest Export Promotion Bureau stats show, Bangladesh earned over $47 billion from its garment exports in the first 11 months of fiscal 2021-22, with a year-on-year growth of 34 per cent. The figure is expected to cross the $50 billion mark by the end of the year.