Apparel exports to face more tax
The government plans to increase tax at source on export proceeds from the apparel sector in the coming fiscal year.
The sector receives a lot of benefits from the government, and now it is time for the exporters to give back -- at least something, according to Finance Minister AMA Muhith.
The tax at source on export receipts had been reduced to 0.3 percent for this fiscal year from 0.8 percent in the previous one.
“If the rate is increased, we can collect a large amount of revenue from the sector,” Muhith said on Friday.
The minister spoke at a discussion on “budget 2015-16: some selected analysis” organised by Bangladesh Institute of Development Studies or BIDS at its office in Dhaka.
Mahbub Ahmed, senior secretary of the Finance Division, said the government will review the subsidy allocations for different sectors, including garment.
“We are going to rationalise subsidy allocation and, possibly, there will be changes in the distribution and measures to avoid its abuse,” he said.Presenting a paper on “fiscal incentives for export industries: lessons for the coming budget” at the discussion, Nazneen Ahmed, senior research fellow of BIDS, said: “The government should review the issue of cash incentives as our resources are limited.”
She said the garment sector enjoys half of the total cash incentives, but now the thrust sectors should get these facilities.
BIDS Senior Research Fellow Monzur Hossain presented another keynote paper on “inflationary impact on households: implications for the budget” and said day labourers and people with low income are the hardest hit by inflation.
He proposed increasing the elderly and widow allowance from existing Tk 300 to Tk 1,000.
Presenting another keynote paper on “financing for the fiscal year 2016: a comprehensive approach”, Abul Basher, researcher of BIDS, said the size of the budget should be increased further.
The size of the budget has been increased by 18 percent in the last five years, but real growth will be just around 10 percent if inflation is taken into account, he said.
BIDS Senior Research Fellow Mohammed Yunus also presented a paper on revenue mobilisation and grants to municipalities at the discussion presided over by BIDS Director General KAS Murshid.