Bangladesh finance minister Abul Maal Abdul Muhith has proposed reduction of supplementary duty rates on fabrics, garments and clothing accessories. The Value Added Tax and Supplementary Duty Act 2012 is scheduled to be implemented from July 2015.
The Budget proposes to reduce supplementary duty on woven fabrics from the existing 30 per cent to 20 per cent, on most knitted or crocheted fabrics from 45 per cent to 30 per cent, on track suits and other garments from 45 per cent to 30 per cent, and on various clothing accessories from 60 per cent to 45 per cent. The target growth for the next fiscal year 2014-15 has been pegged at 7.3 per cent, which would increase to 10 per cent by 2021. To achieve this target, a number of measures, including stimulus packages, will be taken for readymade garments and other sectors to add further momentum to the export sector.
The Budget also names the garment industry among the six priority sectors identified for imparting training of international standards over a period of three years. The FM has proposed reduction of tax at source from 0.80 per cent to 0.30 per cent for garment exports. For the textile sector, in addition to the facilities given in the previous budget, the proposed budget has reduced duty to five per cent from the existing 10 per cent for a few raw materials used in this sector.