Subject to its compliance with some conditions, the Bangladesh government plans to extend the 15 per cent Corporate Tax for the textile sector for another three years.The government will also extend benefits to spinning, yarn dyeing, finishing, coning, fabric dyeing, printing or any other such industries. To enjoy these benefits, both companies must be registered under the Companies Act, and comply with all provisions of that ordinance.

From July 1, 2022, the extension will remain effective until June 30, 2025. Currently, the corporate tax rate is 30 per cent for non-listed companies and 22.5 per cent for the listed ones. This has helped Bangladesh secure second position in RMG exports globally. Extension of reduced tax rate will help Bangladesh sustain this achievement and get expected revenue from this sector. Hailing this as an encouraging move, Mohammad Ali Khokon, President, Bangladesh Textile Mills Association (BTMA) urged the government to continue this facility till 2030 to deal with post-LDC challenges.

Kautubuddin Ahmed, Chairman, Envoy Textile, says, extension to thereduced tax rate is not enough for the sector as its total tax burden has increased due to the Source Tax. He requested the government to provide more facilities to the textile sector such as easy access to gas and electricity connections and loans at low interest rates. Meanwhile, the government plans to slash wholesale rates of fabrics at the local market to 2 per cent from 5 per cent from the next fiscal year.

Monsoor Ahmed, CEO (in-charge), BTMA, said the VAT rate cut will give a relief to local consumers as product prices have already gone high due to hikes in raw material prices. He also demanded that VAT on synthetic and viscose yarns be reduced in line with cotton yarns.