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Exporters demand smooth way for incentives

Exporters participate in a roundtable on exports, organised by The Daily Star at its office in Dhaka yesterday (8 . Photo: Star

Exporters participate in a roundtable on exports, organised by The Daily Star at its office in Dhaka yesterday (8 . Photo: Star

Exporters are facing troubles in receiving cash incentives against their exports due to time-consuming bureaucratic processes, they complained yesterday.

Often, it takes months for an exporter to get the incentives as the process involves commercial banks, the central bank, audit firms, customs department and Export Promotion Bureau.

“We are not getting the incentives timely for some ambiguities in the notices from Bangladesh Bank, National Board of Revenue and from the ministries concerned,” said Mohammad Hatem, an immediate past vice-president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Exporters shared the issue at a roundtable on ‘export challenges and the way forward’ organised by The Daily Star at its office in Dhaka.

Currently, apparel exporters receive 13.25 percent cash incentives — 5 percent for using local yarn, 5 percent for small and medium scale industries, 3 percent for new export destinations and 0.25 percent in general for all sectors.

“The processes for getting the incentives should be simple and hassle-free,” said Lutful Bari, director (operations) of Meghna Group, which exports bicycle.

He said bicycle export was given 10 percent cash incentive till 2010, but no exporter went for it because of cumbersome processes. Later, the government cancelled the incentive.

“Our competitors in China get 15 percent incentives and we urge the government to reintroduce the benefit both for bonded and non-bonded organisations. But it has to be simple and hassle-free,” Bari said.

Though the government has been paying 5 percent cash incentive to garment exporters on the use of local yarn, exporters have to struggle a lot to get it. In 2010, the government introduced another 5 percent cash incentives for small and medium enterprises with a maximum of $3.5 million exports each, based on performance in fiscal 2008-09.

For example, Hatem of BKMEA said, some of the knitwear makers are not getting the money for not having knitting machines in their own factories, although they used local yarn. “But in the notices, it was not mentioned that the garment products should be manufactured in the exporters’ own factories,” Hatem said. “We have to face similar hassles everyday.”

In another example, he said the government did not mention any timeframe for small and medium exporters for getting the incentives, although the exporters were asked to apply for incentives within 180 days of receiving payments from buyers.

“Actually we receive 4 percent incentive, although the government has been saying that it pays 5 percent incentive on total exports,” said Hatem, also the managing director of Narayanganj-based MB Knit Fashions. “We held meetings with different levels of the government, but that did not work,” he said.

The government also introduced cash incentives for the garment exporters in 2009 to offset the fallout of the global financial crisis.

However, Hedayetullah Al-Mamoon, senior secretary to the commerce ministry, said: “Sometimes it takes time to scrutinise the entire process. It is not for bureaucracy. We have to examine the claims.”

“Sometimes exporters do not follow rules, but they seek the incentives,” Mamoon said.

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Source: Daily Star

 

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