Exporters urge Muhith not to hike tax

Exporters yesterday urged the government to keep unchanged the current rate of tax at source on their profits from exports.

The National Board of Revenue now collects tax at 0.3 percent on every individual company's overall annual profit from exports. Finance Minister AMA Muhith proposed to increase the rate to 1 percent from the next fiscal year.

“It's a 233 percent rise which will hamper the growth of the export-oriented industry,” said Abdus Salam Murshedy, president of the Exporters Association of Bangladesh.

Addressing a post-budget press briefing in Dhaka, Murshedy also asked the government to withdraw a proposal for imposing 1 percent duty on capital machinery import. “The import duty will discourage the investment for industrialisation.”

Murshedy also demanded reintroduction of the reduced tax rate of 10 percent for export-oriented industries.

The Duty Evaluation and Internal Audit Commissionerate has been assigned to monitor the bonded warehouses through a budgetary move in fiscal 2013-14.

But the customs bond offices in Dhaka and Chittagong are also monitoring the bonded warehouses simultaneously, he said. “Due to the dual surveillance, complexities are arising in export activity.”

Because of the devaluation of the euro, Murshedy demanded the government provide special incentives to the exporters who export to the eurozone.

He requested the government to take steps to form a refinancing scheme through Bangladesh Bank to create safe workplace and to help the small and medium garment makers to sustain in business through remediation, retrofitting and relocation.

Referring to a study by Standard Chartered bank, Murshedy said $1 million investment in the garment industry creates jobs for 256 people. If the garment sector can achieve 5 percent growth, around 3 lakh people can be employed, he said.

If the growth rate is negative, it will also put negative impact on employment generation, Murshedy added.