The National Board of Revenue (NBR) is reviewing a proposal for further tax benefit for the readymade garment (RMG) exporters.
The review comes a month after apparel makers got the benefit of cut in tax at source.
In September last, the income tax wing of the NBR reduced tax at source for all export-oriented sectors to 0.60 per cent from 1.0 per cent.
Last year, tax at source rate for all export-oriented sectors was 0.70 per cent.
Officials said a proposal of the apparel exporters to revise the tax at source downward to 0.25 per cent is under scrutiny.
A situation paper has already been prepared for the government high-ups' consideration, they said.
Talking to the FE on Sunday, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Siddiqur Rahman said they have sought the tax benefit to stay competitive.
"Cost of doing business is increasing in Bangladesh. On the other hand, prices of garment products are declining in the international market," he said.
'We've demanded continuing the reduced tax benefit for apparel exporters for the next five years," he added.
The government had reduced tax at source for the export-oriented sector during the last few years after passing the national budget. According to officials, such reduction after budget affected projected tax collection for that year.
According to the Income Tax Ordinance-1984, exporters are supposed to pay 1.0 per cent tax at source on their export income.
In the Finance Act-2018, the NBR had kept the 1.0 per cent rate unchanged.
Later, the board issued two Statutory Regulatory Orders (SROs) by reducing the tax at source for all export-oriented sectors.
Also, corporate tax rates were reduced to 12 per cent for garment exporters and 10 per cent for green factories.
As per income tax law, export-oriented industries are supposed to pay 35 per cent corporate tax on their annual income.
NBR officials estimated a Tk 15 billion loss in income tax collection this year because of reducing the rates for exporters.
Officials said they have prepared revenue projection for the current fiscal year (FY) calculating 1.0 per cent tax at source from the export-oriented sectors.
The government had earlier assured apparel exporters of the tax benefit as part of incentive package to implement the new minimum wage for garment workers.
Immediately after the announcement of new wage structure, exporters demanded additional benefits, either in forms of tax benefit or cash incentives.
