The government has planned to provide a highest cash incentive of 5 percent for the readymade garment industry in the budget for Fiscal Year 2019-20.
Currently, only four sectors of RMG are enjoying 4% cash incentive for exports to non-traditional markets. This time the budget proposes a generalised 1% for all.Finance Minister AHM Mustafa Kamal on Thursday proposed to provide an export incentive of 1 percent in the next fiscal to the rest of the sectors under RMG.
Now the exports to traditional markets will get a cash incentive of 1% while to non-traditional markets 5%.
An allocation of additional Tk2,825 crore will be made in the budget for FY’19-20 for this purpose, the finance minister said in his budget speech.
The existing tax rates for RMG sector will remain the same which the manufacturers wanted to lower.
Currently, the tax rate for readymade garment is 12 percent. The rate comes down to 10 percent if there is a green building certification. Besides, the textile sector witnesses 15 percent tax rate.
Given the contribution of these sectors, the tax rates remain unchanged, particularly when it comes to boosting export and generating employment.