The tax at source for readymade garment (RMG) sector has been reduced to 0.25 percent from the existing 0.6 percent in a bid to enhance the competitive edge of the sector.
The National Board of Revenue (NBR) has issued a Statutory Regulatory Order (SRO) on Thursday (Jan 3), which said the new rate will be effective from Jan 1, reports state news agency BSS.
With the latest revision, the tax at source for exports in the RMG sector has been reduced for the second time in the current fiscal year.
In September last year, the tax at source for exports in the RMG was slashed to 0.6 percent from 1 percent.
“The RMG factory owners have demanded of the government to give tax exemption facility to this sector in view of implementation of new wage structure for the RMG workers,” NBR Chairman M Mosharraf Hossain Bhuiyan told the news agency.
Bangladesh’s apparel sector accounts for more than 80 percent of the country’s export earnings.
The country has set an export target of $37.5 billion for the current fiscal year, which is a 1.35 percent rise from the previous year.
The government estimates the garment industry will be able to fetch $31.6 billion in exports by the end of the current fiscal year.
The target from woven garment is set at $15.06 billion, up 10.08 percent from last year while it is $15.10 billion for knitwear, which is a 9.76 percent rise.
In the previous fiscal 2016-17, the apparel sector earned $28.14 billion -- $14.39 billion from woven garments and $13.75 billion from knitwear.