The Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association recently urged the government to provide them with cash incentives and continue the existing 0.50 per cent source tax. The association also demanded withdrawal of value-added tax (VAT) on sub-contract as proposed for the readymade garment (RMG) sector.
"More than 43 products and services are given cash incentives to help encourage exports. But despite being 100 per cent export-oriented industry and small and medium in size, the sector is yet to get any such support," the association said in a statement.
Fabric and accessories are two major raw materials for the RMG industry, while some 1,900 accessories and packaging makers meet almost all demands of the RMG sector, it said.
Accessories factories in many cases buy raw materials from the domestic market through back-to-back letter of credit (LC) and export, the association was quoted as saying by Bangladeshi media reports.
It also demanded continuation of existing 0.50 per cent source tax for the next five years that has been proposed to increase to 1.0 per cent in the latest budget.