BGMEA president demands duty free import of machinery and spare parts and reduction of VAT.
The Bangladesh Garment Manufacturers and Exporters Association, BGMEA, headed by President Shaiful Islam Mohiuddin, in a meeting with Dr Nasiuddin Ahmed of the National Board of Revenue has demanded that the government reduce duties for machineries and spare parts and for an extension of the bonding period.
Mohiuddin urged the government to provide duty free imports on capital machinery, spare parts, safety equipment and devices and construction materials.
Mohiuddin added that many small and medium sized garment businesses were facing severe difficulties whilst on the one hand operating mostly in rented premises and on the other hand having to cope with an extra nine per cent VAT (value Added Tax) on rented premises. He suggested that the readymade garment industry could better contribute to the country’s economy if the tax imposition on rented space was withdrawn.
Although the government has already slashed VAT rates from fifteen per cent to nine per cent following the request of the BGMEA, it is insufficient due to the falling profit margins caused by an increase in power charges, rise in furnace oil charges and reduction on export returns.
The BGMEA also requested interest free loans to build worker dormitories. Earlier the BGMEA also requested an lower interest loans and to halt Foreign Direct Investment (FDI) to help local manufacturers more effectively compete.
