‘Please, we don’t want further FDI in the garment sector. The local manufacturers are not capable to compete with foreign manufacturers. Because, unlike the local manufacturers, the foreigners receive special benefits like tax holiday and all the utility services, including power, gas, and water, in the export processing zones,’ BGMEA president Shafiul Islam Mohiuddin told a pre-budget meeting with the National Board of Revenue.
BGMEA leaders submitted a set of proposals to NBR chairman Nasiruddin Ahmed, who presided over the meeting, for incorporation in the next national budget.
Local garment manufacturing units are contributing 92 per cent of the apparel products that the country exports, with only 8 per cent coming from the EPZs, the BGMEA president mentioned.
He said, ‘More foreign investment in garment manufacturing sector will hamstring the local industries outside the EPZs which are facing a plethora of problems like high bank interest, energy and utility crisis, and price hike of cotton on the global market.’
The profit margin from garment export has also reduced by 30-35 per cent despite a 42 per cent growth in export over the first eight months of the current fiscal year as the banks are charging 15-17 per cent interest on industrial loans, he added.
The BGMEA demanded tax holiday and other facilities enjoyed by the manufacturers in the EPZs for all cent per cent export-oriented garment manufacturing units in the country to reduce the huge disparity between the foreign and local entrepreneurs.
According to the Industrial Policy 2005, the government was to extend all the facilities given to foreign entrepreneurs in the EPZs to local manufacturers, the association leaders pointed out, regretting that the policy was yet to be implemented.
It urged the NBR to withdraw the 9 per cent value-added tax imposed on land and holdings rented by the export-oriented garment industries as well as on all services procured by them.
The BGMEA leaders requested the NBR to consider the tax deducted at source as final tax liability and to reduce it to 0.25 per cent from 0.4 per cent currently imposed on the garment industries.
The trade body also appealed to the NBR to withdraw the tax imposed on all kinds of cash incentives offered to them by the government.
‘The government may not provide cash incentive but it is irrational to impose tax on incentives given to help the sector compete with its foreign competitors,’ Mohiuddin pointed out.
The BGMEA president demanded that the NBR should take measures so that the customs department released the machinery and parts not listed in the statutory regulatory order on payment of 1 per cent duty by recommendation of the trade association concerned.
‘The NBR is aware of the disparities between local and foreign investors in the RMG sector,’ Nasiruddin Ahmed said and assured the BGMEA leaders of reducing them.
He also said the NBR should not take any measure that discouraged foreign investors.
BGMEA vice president (finance) SM Mannan Kochi, directors Shahidulla Azim, Sheikh Atiar Rahman Dipu, A Razzaque Sattar, and Faizun Nabi Chowdhury, and its customs standing committee chairman Monir Hossain, NBR VAT member Abdul Mannan Patwari and income tax policy first secretary Apurba Kanti Das, among others, were present in the meeting.
News Source: New Age,
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