BGBA Seeks Advance Income Tax Reduction to 5.0% in Next Budget

| Updated:
08 June 2020 09:50:09

The Bangladesh Garment Buying House Association has demanded a reduction in the Advance Income Tax (AIT) to 5.0 percent from the existing 10 percent in the next budget.

“Due to the ongoing coronavirus pandemic, we expect a limited volume of work orders to be carried out in the coming months,” BGBA Chairman Kazi Iftekhar Hossain told a news conference in Dhaka on Saturday.

Buyout houses have yet to receive any funds from the government’s announced stimulus package, he said, adding that local buyout houses are struggling to survive.

Local buying houses help bring work orders to local clothing exporters from foreign buyers and do the business and marketing parts, he said, proposing a 5.0 percent reduction in the existing advanced income tax in the next budget.

The leader of the Bangladesh Garment Buying Houses Association (BGBA) also urged the government to grant a three-year tax holiday to new buying houses.

He demanded easy loans for the purchase of houses from the package announced by the government so that they can survive during this coronavirus pandemic.

However, Hossain said the ongoing pandemic could be an opportunity for local exporters as global demand for items such as masks, personal protective equipment, hospital sheets and isolation cloths is increasing globally.

“Domestic demand for these items has also increased. Therefore, we must seize this opportunity,” Hossain added.

“The size of the local and global market for these items is worth billions of dollars. We can easily take this market,” said the BGBA leader.

Backward linkage industries such as the country’s spinning, weaving and dyeing sectors would also benefit, he said.

Hossain in his written speech said that they are not in favor of laying off the workers and proposed to use the workforce jointly, including the factory owners, the government and other stakeholders, to prevent any indiscipline in the country.

Some 0.4 million employees are working in 826 clothing buying houses in the country, it added.

Criticizing some foreign buyers such as Debenhams which laid off its Bangladesh office with 69 employees, he urged the government to monitor foreign buying houses and the activities of their liaison offices.

Calling blacklisting or taking administrative action against global buyers “not business-friendly,” the BGBA leader said garment exports are not possible without global buyers and such measures could have a negative impact on business.

He admitted that legal action must be taken if any buyer breaks the law. But it is not wise to blame everyone in general.

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