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Bangladeshi Garment Makers Request Tax Breaks

by Mary Swire, Tax-News.com, Hong Kong

21 April 2014


Having incurred significant costs to relocate their operations to safer buildings following the disastrous collapse of a factory last year, Bangladeshi garment manufacturing businesses have requested supportive tax breaks from the Government in the 2014-15 Budget due in June.

During a meeting with the National Board of Revenue in Dhaka, the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association, and the Bangladesh Textile Mills Association pointed out that, as garment makers have had to close production lines in unsuitable buildings to relocate to newly built factories, they are looking for the Government to grant a waiver of import duties on construction and related materials.

To reduce their relocation costs as far as possible, the manufacturers have requested an exemption from the duty on the import of pre-fabricated steel building materials (currently subject to tax at 61 percent), on fire-fighting equipment, and on energy-efficient lighting. In addition, the Government has been asked to provide further assistance by exempting the energy bills of exporting companies from value-added tax.

The textiles and clothing industry is Bangladesh's biggest export and foreign exchange earner, its largest industrial employer, and the greatest driver of economic growth. 80 percent of the country's export revenues come from the industry, and therefore any decision on the sector's taxation would be particularly significant.

TAGS: tax | value added tax (VAT) | energy | employees | manufacturing | Bangladesh | tax breaks | import duty | construction

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