Garment accessories makers seek renewal of licences once in every 3 years
At present, the businesses have to renew the mandatory licences on a yearly basis.
The new proposal means the businessmen would pay required fees against their licences all at once for the next three years while going for the renewal.
The accessories makers also demanded suspension of corporate tax for three years saying many factories remained closed or failed to resume operations due to non-payment from buyers and insufficient government financial support during the Covid-19 pandemic since March’ 20.
The accessories and packaging makers and exporters made the demands to be included in the budget for the next fiscal year of 2022-23, at a pre-budget meeting held on Thursday at the National Board of Revenue (NBR) office, headed by the tax authority’s Chairman Abu Hena Md Rahmatul Muneem.
Speaking at the meeting, Moazzem Hossain Moti, president of Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association, said some 30 licences or certificates were needed to set up a factory that included trade, fire and bond licences and an environmental certificate.
All the documents are issued for one year having the annual renewal requirement – as a result, an industry needs to spend more time and money that could otherwise be saved, he said.
If the three-year renewal cycle is allowed, the government will also be benefited by receiving revenues or fees in advance, he explained.
Mr Moazzem said prices of raw materials required in the industry had gone up by 500-800 per cent due to global container scarcity and the pandemic.
Local accessories and packaging makers export their produced goods to export-oriented RMG and other sectors through back to back letters of credit.
As buyers are not increasing prices of products, factories are operating only to keep running their businesses during the pandemic without making profits, he said, adding that in such a situation it was difficult to pay source tax for the factories.
He urged the government to withhold corporate tax for the sector for the next three years.
The leaders of the association also requested the government to reduce source tax to 0.25 per cent from the existing 0.50 per cent and fix the rate as final settlement for the next three years mainly to support the small and medium factories.
Their other demands included providing cash incentives, allowing sub-contracting facilities to ‘deemed exporters’, and implementing the NBR decision to allow the trade body to issue utilisation permission (UP).
Some 1,700 small and medium accessories and packaging makers are meeting the requirements for 30-35 types of items, needed for the RMG exporters, while saving a huge amount of foreign currency, added Moazzem.