Thirty thousand garment workers became jobless during last nine months
About thirty thousand garment workers have become jobless from January to September of current year. During these nine months 59 garment factories were closed. Under these circumstances, the garments organizations demanded additional incentives in garment sector like other countries.
According to the sources of Bangladesh Garments Manufacturers and Exporters Association(BGMEA) that from 2009-10 to 2013-14 fiscals the export growth was 96 percent or 12 billion dollars. From 2014-15 to 2018-19 fiscals the growth was 34 percent or 8.6 billion dollars. So the growth of this sector is reducing every year for many reasons. During last five years (2014- 2018) in US market the price fall was 7.4 percent and in European market the fall was 3.64 percent. Lastly in October the prices of all items fell. So in relation to competing countries the growth of Bangladesh is much less.
Recently the garment businesses held a meeting with the Commerce ministry regarding their problems. The businesses pointed out that the export clearance; shipment, high rate of interests of bank loan and other problems. The businesses also demanded the revaluation of dollars. Commerce Minister Tipu Munshi agreed to their proposals and informed that there was a discussion about the high rate bank interests in ECNEC.
In the meeting with the Commerce Ministry the BGMEA leaders recommended on the expansion of tax net. If this is done then the pressure on the businesses will reduce, they mentioned.
In the meeting the Finance Secretary assured that the problem of bank credit and interests will be considered after discussing with Bangladesh Bank. NBR chairman said that to reduce extra pressure the rate of tax will be reduced.
It is learnt that in this sector Indian government has allocated 50 thousand crores of Rupee as Reimbursement of Taxes & Duties for Export Promotion and also withdrew Goods and Services Taxes. Again the Vietnam government has given total tax exemption for first 4 years, 50 percent exemption for next 9 years and only 10 percent for next 15 years. Even Pakistan has also arranged only 7.5 percent interest for garments’ export under Export Refinancing Scheme.
On the other hand, Bangladesh government is providing 4 percent incentives in garments’ export sector for the new markets. This incentive has increased the export growth 450 percent or 3.8 billion dollars during last ten years. In 2019-20 fiscal the government has increased the source tax on cash incentives / subsidy at the rate of 10 percent instead of 3 percent. They demanded the complete withdrawal of ten percent income tax in this sector.
Besides, the businesses also demanded the complete write off of the bank loan amounting to Taka 238.49 crore principal amount and interests earlier financed to 133 sick industries provided by the both government and private banks. The BGMEA also gave several proposals for the protection small and medium industries.