Bangladesh will reduce corporate tax to 20 per cent from the existing 35 per cent for the readymade garment industry. The readymade garment sector is one of the main exporting sectors of Bangladesh. This sector is making important contributions to GDP growth and employment generation and says the reduced tax rate will ease the burden and help it become more competitive.

During July-April of the current fiscal year, Bangladesh’s garment export earnings stood at $27.6 billion compared to $25.3 billion during the same period of the last fiscal year. Export earnings from woven garments and knitwear recorded an increase of 12.7 and 7.3 per cent respectively. Notably among the main export markets exports to both the USA and the Euro zone have increased.

Bangladesh is providing substantial tax benefits to the apparel sector, acknowledging its contribution to the economy. The textile sector is also being encouraged. Addressing its demands, as well as to help it to move forward, duty on stripping chemicals will be reduced to 15 per cent from the existing 25 per cent. Duty on flax fiber and spandex or elastraometrics, applicable now at 10 per cent, will be reduced to five per cent.