BTMA for keeping source tax on exports at 0.50%
The Bangladesh Textile Mills Association (BTMA) has urged the government to keep the source tax on export earnings at existing 0.5%.
The finance minister on Thursday proposed to increase the source tax on export earnings to 1% from 0.5% in the national budget for the FY23.
"Although there is a demand for readymade garments and textile products in the international market, the exporters are not getting the desired price. BTMA thinks that a 1% source tax on export earnings will be an additional pressure on exporters in the face of rising raw material prices," the BTMA said in a statement.
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The government imposed the source tax on exports for the first time in 2005. Initially, the rate was 0.25%. Later, it was raised at different times and was set at 1% in fiscal 2014-15.
More than 80% of Bangladesh's export income comes from the readymade garment sector alone. Accordingly, entrepreneurs in this sector become the most vocal against attempts to hike the source tax on exports.
For the last two years, the government has been levying 0.5% source tax on export earnings considering the pandemic situation.
