Apparel business bodies have demanded for five percent cash incentive for the next five year against exports in traditional and non-traditional markets as they claim the sector is now in facing a crisis.
The call came on Monday (May 27) in a pre-budget media call jointly organised by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA).
The Bangladeshi apparel sector “is now facing existential crisis”, BGMEA President Rubana Huq said before claiming that as many as 22 factories were shut down in the last one month causing nearly 10,500 people to lose jobs.
“The industry will be in trouble unless it gets 5 percent cash incentive for the next five years,” she said.
According to her, the Bangladeshi RMG industry can turn back once again with the cash assistance.
“Five percent incentive means the government has to spend Tk 140 billion in subsidies. However, it will stand at Tk 117.24 billion, if the existing assistances are deducted,” said Huq.

Currently, apparel exporters enjoy 4 percent cash incentive only against export to non-traditional export destinations.

Considering the present status of the sector, the government should continue the existing 0.25 percent tax at source and treat it as the final tax, she demanded.

Exports to US was increasing by 16 to 17 percent because of the US-China trade war, so there was a big opportunity for the Bangladeshi apparel goods to grow there, said the BGMEA chief.

The business leader urged the government to keep corporate tax at 12 percent for the traditional textile factory owners and 10 percent for the apparel makers producing goods in certified eco-friendly factory.

In addition, the trade bodies also sought special allocation for the wellbeing of the workers such as establishing dormitories and ration.

On top of that, they also called for single digit loan facilities for the apparel sector and ensuring its proper implementation.

Bangladesh is the largest readymade garment exporter after China with the sector accounting for more than 80 percent of the country’s export earnings,
Garments worth around $26 billion was exported in the first three quarters of the fiscal 2018-19 year, marking a 13.65 percent growth.