Source: DhakaTribune
The country's textile and garment makers have renewed their demands for 0.30% tax at source for the next fiscal year to attract more investment.
If it is not possible, they have urged the government to continue the exiting 0.6% for the next fiscal year 2016-17 for the sake of creating more jobs.
Several leaders of the RMG and textile sectors came up with the call at a joint press conference at BGMEA headquarters in the city yesterday.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) and Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) jointly organised the press conference.
In the proposed budget for the fiscal year 2016-17, the government has proposed to increase tax at source to 1.5% from 0.60%.
"It has become a tradition for the government to increase tax at source in every budget, but I think that there should be a certain rate for a certain period," BGMEA President Siddiqur Rahman told the press conference.
"Textile and RMG sector would be the worst victim of the proposed tax at source. In the proposed budget for the next fiscal, tax at source increased to 1.5% from 0.60%, a 150% rise, for all export oriented-sectors, which will hinder the growth of the sectors," he stated.
On the other hand, Rahman said: "The government has set 7.2% GDP growth for the next fiscal, which is conflicting with government's labor intensive industrial policy as 25% contribution comes from the manufacturing sector."
As the production cost has been increased by 8% to 10% due to the compliance issues, the risk factor of the RMG sector has already increased by 30% to 35%. Considering all the aspects, most of the RMG factories would not be able to survive, he added.
"The government has increased its revenue earning target indiscriminately without considering the consequence on the overall investment," said FBCCI First Vice President Shafiul Islam Mohiuddin who also stressed on enhancing revenues collection through industrialisation.
He said: "The budget proposal should not be a burden for the investors, which will discourage the investment, a tool for creating new jobs."
The proposed budget has increased tax on chemicals from 3% to 5%, which will ultimately discourage the investments, said AH Aslam Sunny, first vice president of BKMEA.
In September last year, the government had hiked prices of gas by 100% and it has increased tax at source to 1.5%. Now the question is whether the government really wants industrialisation or not, said Md Fazlul Hoque, vice president of BTMA.
"If the government continues to impose tax burden one after another on the industry people, how can the country's industry would grow further," he questioned.