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RMG exporters to get relief as govt cuts source tax on exports again

Published : Tuesday, 15 January, 2019 at 7:56 PM  Count : 370

RMG exporters to get relief as govt cuts source tax on exports again

RMG exporters to get relief as govt cuts source tax on exports again


The government has once again slashed tax at source to 0.25 percent from the existing 0.60 percent for exporting goods to give some relief mainly to the RMG exporters following the recent hike in the wages of garment workers.

The Internal Resources Division has issued a statutory regulatory order (SRO) signed by its Senior Secretary and National Board of Revenue (NBR) Chairman Mosharraf Hossain Bhuiyan to this end. The new measure came into effect on January 1 last.

Following the issuance of the SRO under clause 44(4) of the Income Tax Ordinance 1985, the new rate will be applicable for all the export items, excluding jute goods, reports UNB.

From now on, exporters will have to pay Tk 0.25 instead of Tk 0.60 as tax at source for exporting goods worth Tk 100.

On September 5, 2018, the government reduced the rate from 1 percent to 0.60 percent following demand from businessmen.

A senior NBR official, preferring not to be quoted, said the cut in the tax rate for exporters, especially the RMG ones, came as they accepted the government's proposal to increase the wages of their workers.

"Although we're apprehending a significant fall in the revenue collection from this sector, we've reduced the rate as the garment owners demanded so to raise the wages of their workers. The government is always sincere about workers' welfare," he said.

The official also mentioned that the new rate will improve the compatibility of Bangladeshi products in the world market.


For fiscal year 2018-19, the government has set a revenue target -- tax and non-tax revenue -- at Tk 339,280 crore. Of the total amount, the NBR has been tasked to source Tk 296,201 crore.

Income tax and other direct taxes will contribute Tk 102,201 crore while import and export tax Tk 32,589 crore, VAT Tk 110,543 crore, supplementary duty Tk 48,766, excise duty Tk 2,091 while turnover tax contribute Tk 11 crore.

The government on Sunday announced a revised pay structure for the garment sector following directives from Prime Minister Sheikh Hasina.

The wages of garment workers under grades 1, 2, 3, 4, 5 and 6 out of total seven grades were adjusted freshly.

The minimum wage under the 6th grade has been increased to Tk 8,420 from Tk 8,405 which was Tk 5,678 in 2013 while that under the 5th grade to Tk 8,875 from Tk 8,855 which was Tk 6,042 in 2013.

A 4th grade worker will now get Tk 9,347 instead of Tk 9,245 as minimum wage against Tk 6,420 in 2013 while 3rd grade one will get Tk 9,845 instead of Tk 9,590 which was Tk 6,805 in 2013.

The minimum wage under the 2nd grade has been increased to Tk 15,416 from Tk 14,630 which was Tk 10,900 in 2013 while that under 1st grade to Tk 18,257 from Tk 17,510 which was Tk 13,000 in 2013.

On November 26 last, the government published a gazette notification fixing Tk 8,000 as the minimum wage of garment workers.



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