Garment makers yesterday called upon the National Board of Revenue to collect 0.3 percent tax at source on 10 percent of their profits from exports, instead of overall profits.
The NBR now collects source tax at 0.3 percent on overall profit on apparel export by an individual company in a year, which was introduced in the current budget, scrapping the previous provision of 0.8 percent tax on 10 percent of profit.
Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, proposed the option at a pre-budget meeting with revenue officials at the NBR office in Dhaka.
Islam said, although the NBR reduced the source tax to 0.3 percent from 0.8 percent, the revenue office has started collecting the tax on overall profit, which is a major deviation from what they had actually demanded.
“We also want removal of value added tax on the local purchase of raw materials, as the option to impose such taxes is not allowed in the current law,” Islam added.
He also proposed removing all taxes on the import of materials to construct pre-fabricated factory buildings at the 'garment village' and fireproof colour coating.
Rafez Alam Chowdhury, president of Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association, proposed authorising the association to issue certificates of 'utilisation permission', which is a statement of required materials to manufacture export goods.
“We need to build a long-term partnership between the tax office and garment exporters so that we can remove all barriers in business through discussion,” said Farid Uddin, a member of the NBR, while chairing the meeting.
Aslam Sunny, acting president of Bangladesh Knitwear Manufacturers and Exporters Association, and Abdus Salam Murshedy, a former BGMEA president, also spoke.