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Apparel, textiles to get tax benefits as Finance Minister rolls out budget

downloadFinance minister has proposed reduction of tax at source and duty withdrawal for the imports of prefabricated building raw materials and safety equipment as the textile and clothing industry struggles to meet global retailers’ standards.

The finance minister has proposed the reduction of tax at source from 0.80 per cent to 0.30 per cent for the garment exports while proposed to reduce it to 0.60 per cent for all other exports.

“To encourage the export sector, I propose to reduce the rate of tax at source on Cash Incentive from 5 per cent to 3 per cent,” the minister said in his budget speech.

These preferential rates will remain effective up to 30 June, 2015.

In order to help create favourable production environment compatible with international standards, the budget has also proposed conditional duty waiver for import of raw materials necessary for setting up prefabricated buildings.

Duty will also be waived in case of imports of fire-resistant door, emergency light, and sprinkler system to ensure internal security and compliance of standards in ready-made garment sector.

For the textile sector, in addition to the facilities given in the previous budget, the proposed budget has reduced duty to five per cent from the existing 10 per cent for a few raw materials used in this sector.

Flex fiber, a raw material used to make the fabrics bright, will be subjected to 5 per cent duty from the present 10 per cent as per the budget proposal. Likewise, the existing 5 per cent duty on artificial staple fiber will be reduced to 3 per cent.

“I propose to impose 1 (one) per cent ‘Environment Protection Surcharge’ or ‘Green Tax’ on ad-valorem basis on all kinds of products manufactured in Bangladesh by the industries which pollute the environment,” the minister said explaining that this is to encourage the owners of the industries, which cause excessive pollution to the environment, to set up effluent treatment plants (ETPs) and to make them aware of the harmful effect of the polluted environment.

Source: Financial Express

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