Garment exporters get cash benefits against fund transfer via TT
Apparel makers will get 5 percent cash benefits against their export proceeds if sent through an electronic system known as telegraphic transfer (TT)—a move that aims to help them recoup the losses caused by political unrest.
The products that will enjoy the incentive from the government are woven, knitwear and terri-towels.
Separately, the government is going to cut export tax by a half and increase cash incentive by one percentage point for garment exporters, which will cost the government around Tk 3,000 crore.
The Finance Division yesterday issued a notice, saying the garment exporters will get the incentives after fulfilling conditions set by the central bank.
A finance ministry official said some sectors, including fish, vegetables, potatoes and jute goods, now get cash incentive against advance TT on condition that the value of exports must be repatriated from the importing country.
A Bangladesh Bank official said, in many cases the export value does not come from the country that the exports were meant for.
As a result, providing the incentive will be difficult if the existing conditions are kept in place, the BB official said, adding that the conditions will be slapped in a way that minimises misuse.
Meanwhile, at a meeting yesterday, Finance Minister AMA Muhith took opinions from garment makers about the incentive package.
The finance ministry official said the government will make an announcement on the stimulus package in a couple of days once the prime minister gives a go-ahead.
The finance ministry has already prepared a draft plan about the stimulus package and discussed different aspects of the package with the garment exporters.
The government has a plan to bring down export tax for the sector to 0.4 percent from 0.8 percent now and the package may cause the government a revenue loss of around Tk 1,000 crore a year.
The government may also increase the amount of cash incentive for garment exporters by 1 percent over the existing rate of their export proceeds. The meeting was told that it would cost the government around Tk 2,000 crore.
Three platforms of garment and knitwear makers and textile mill owners placed a three-point demand to the finance minister on December 11 to help them offset the extra cost following the recent hike in garment wages. They also demanded measures to make up for the losses caused by political unrest.
The finance minister later sat with the officials of the central bank, the finance ministry and the National Board of Revenue to devise plans on the stimulus packages.