In a joint post-budget press conference held at the Bangladesh Garment Manufacturers and Exporters Association office in Uttara, leaders of the country's textile and apparel sector voiced their concerns regarding the proposed budget for the fiscal year 2025. Representatives from BGMEA, Bangladesh Knitwear Manufacturers and Exporters Association, and Bangladesh Textile Mills Association urged the government to reconsider certain aspects of the budget that they believe could adversely affect the industry.
One of the primary concerns raised by the sector leaders was the absence of a reduction in source tax, which they had previously requested to be lowered from 1% to 0.5%. SM Mannan Kochi, the president of BGMEA, expressed his frustration that this demand was not addressed in the proposed budget. He emphasized the need for policy support, particularly the source tax reduction, to help the industry navigate through challenging times.
Another point of contention was the proposed 1% duty on the import of capital machinery and construction materials by factories located in economic zones. The sector leaders argued that this measure, along with the proposed increase in import duty on various construction materials used in steel buildings from 5% to 10%, would discourage investment and hinder job creation. They called for the withdrawal of these duties to foster a more conducive environment for industrial growth.
The readymade garment exporters also highlighted the importance of continuing cash incentive support until 2029. They requested the government not to reduce the incentive rate until alternative cash supports are introduced. Additionally, the BGMEA president urged the government to reconsider its decision to withhold gas and electricity connections from factories outside the economic zones, as this could further strain the industry.
Mohammad Ali Khokon, the president of BTMA, raised concerns about the proposed 7.5% VAT on garment waste, also known as "jhut," and the 15% VAT on fibers made from such waste. He demanded the withdrawal of these taxes, along with the 5% VAT on man-made fibers, 5% advance tax, and 5% advance income tax on flax fiber. These measures, he argued, would place an additional burden on the textile industry.
The executive president of BKMEA, Mohammad Hatem, emphasized the challenges faced by the textile and clothing industry due to the dollar crisis, inadequate energy supply, and high interest rates. He warned that if the sector's demands are not met, the industry might face further setbacks, exacerbating an already difficult situation.
Despite their concerns, the sector leaders also acknowledged and appreciated some of the proposed measures in the budget. They welcomed the government's decision to allow the import of 17 textile goods at a reduced rate, the reduction of tax on chillers from 104.68% to 10%, and the lowering of import duty on polyester staple fiber and pet chips (textile grade). These steps were seen as positive developments for the industry.
As the government finalizes the budget for the upcoming fiscal year, the textile and apparel sector leaders hope that their concerns will be taken into consideration. They believe that addressing these issues and providing the necessary support will be crucial for the industry's growth, competitiveness, and its ability to continue contributing significantly to Bangladesh's economy.
