Garment makers in Bangladesh have urged the government to collect 0.3 per cent tax at source on 10 per cent of their profits from exports, instead of overall profits, according to media reports in the country.
The National Board of Revenue now collects source tax at 0.3 per cent on overall profit on apparel export by an individual company in a year, which was introduced in the current budget, scrapping the previous provision of 0.8 per cent tax on 10 per cent of profit.
The suggestion of the Bangladesh Garment Manufacturers and Exporters Association came at a pre-budget meeting with revenue officials at the NBR office in Dhaka.
Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association said although the NBR reduced the source tax to 0.3 per cent from 0.8 per cent, the revenue office has started collecting the tax on overall profit, which is a major deviation from what they had actually demanded.
“We also want removal of value added tax on the local purchase of raw materials, as the option to impose such taxes is not allowed in the current law,” Islam said.
He also proposed removing all taxes on the import of materials to construct pre-fabricated factory buildings at the 'garment village' and fireproof colour coating.