May 21st, 2019
Business / শিল্প-বাণিজ্য
Responding to the needs of the garment sector
September 14th, 20102,779 views

The readymade garments (RMG) sector, the prime source of the country's export earnings, is not unfortunately getting the priority it deserves from the government.

However, the latest decision of the cabinet to slash tax on export bills by 0.1 per cent in a bid to facilitate exporters to compete in the international market and implement the new wage board award for garment workers is otherwise welcome. The advance income tax for RMG units has also been reduced to 0.40 per cent. Earlier, the government in the last Finance Bill raised the AIT to 1.0 per cent from earlier 0.25 per cent. Then it was later reduced to 0.50 per cent following requests from the RMG owners. Meanwhile, Bangladesh Garment Manufacturers & Exporters Association (BGMEA) has termed the latest reduction of AIT & related taxes as "inadequate", considering the higher costs of doing business. There is no denying that the local RMG owners have of late been facing stiff competition in the international market. There are also delays involved in shipment. The exporters have to spend at least one week now at the port which took two to three days earlier.

According to the association of RMG industries, BGMEA, some 40 per cent of RMG industries would face closure only months from now if the government does not act in time. They have been desperately seeking various supports from the government for nearly a year, in line with those given by other exporting countries in South East Asia and South Asia.

The government has not also responded yet to the suggestion of the BGMEA for raising a special security force to protect the RMG units on the plea of the costs of raising and rearing it. But this is a penny wise and pound foolish policy. The costs of rearing a force exclusively for the RMG sector would be peanuts compared to the saving and earning of resources in this sector the force could truly promote.

The policy planners in the government should act more responsibly and extend special assistance to the RMG sector in time. Such assistance would help the industry to remain in the competition against rivals.

M M Qutub

Mohammadpur, Dhaka