Commerce Minister Tofail Ahmed yesterday called for reducing tax at source on exports of garments to a tolerable level from the proposed 1 percent for the sake of the country's highest foreign currency earning sector.
In his budget speech on June 4, Finance Minister AMA Muhith proposed increasing tax at source for the export sectors from 0.30 percent to 1 percent for 2015-16.
Bangladesh is the world's second largest garment exporting country, which was badly affected in the 92 days of shutdowns and blockade enforced by the BNP-led 20-party alliance this year, Ahmed told parliament. The devaluation of the euro has also hit the businesses hard, he said.
Because of these factors, the garment sector may fail to attain its export target of $33.2 billion in the outgoing fiscal year, he said.
He urged Muhith to take practical and rationale steps to save the local industries and suggested the government should impose high duty on imports to protect the industries.
Ahmed said the government should give more attention to the prospective sectors like furniture, jute, shipbuilding and pharmaceuticals and give cash incentives to help them flourish.
He hoped the current level of exports of $1.5 billion from leather and leather products would go up to $2 billion in the next two to three years and sought tax holiday for the poultry sector.
The minister said Bangladesh would become self-reliant in tea production and go for more exports by 2021.
He also suggested reduction of import duty on completely knocked down kits to help local industries assemble more motorcycles.
The minister said steps have already been taken for product and market diversification in Latin America and preferential trade agreements have been signed with Brazil, Argentina and Chili to boost exports of Bangladeshi products.
Bangladesh has got duty- and quota-free access to many developed countries, including Australia, New Zealand, Norway, China, Canada and the EU, he said.
Even India has also provided Bangladesh with such facility, he said.
Considering the current purchasing power parity, Bangladesh would not only become a mid-income country by 2021 but also be graduated from a least developed country soon, Ahmed said.
The extensive government monitoring has kept the prices of essentials stable since the beginning of the month of Ramadan, he said.