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Bangladeshi apparel makers seek policy support to relocate plants
Publication Date : 19-04-2014
Bangladeshi garment makers on Thursday sought policy support to immediately relocate their factories to purpose-made buildings to ensure workers' safety.
“We are under pressure to relocate hazardous factories to safer places in bids to continue exports globally,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
In the last six months, global retailers cancelled orders worth around $110 million from 57 factories housed in shared buildings, he said at a pre-budget discussion with the National Board of Revenue at the tax administrator's office in Dhaka.
So far, BGMEA has shut production at 13 risky buildings in and around Dhaka during factory inspection, he added.
“It is an urgent need to relocate the factories from faulty buildings. So we want duty waivers for building materials.”
The government currently imposes 61 per cent duty on the import of pre-fabricated building materials, he said. “So we want a 100 per cent waiver on such items to minimise the relocation costs.”
Of the 3,600 garment factories now in operation, 40 per cent are housed in shared buildings employing around 15 lakh people; the rest operate in converted and purpose-made buildings, Islam said.
BGMEA also called upon the government to waive all duties and taxes on the import of modern fire fighting equipment and energy saving lights, especially for the export oriented factories.
Currently, NBR charges 31 per cent in duties on the import of LED lights; such duties should also be waived, Islam said.
Bangladesh Knitwear Manufacturers and Exporters Association urged the government to exclude value added taxes from their gas and electricity bills.
Currently, export oriented companies receive 80 per cent VAT waiver on gas and electricity bills, said Mohammad Hatem, first vice-president of BKMEA. “But we are failing to get such a waiver.”
He also called upon NBR to extend the deadline to submit VAT returns from one month to six months to minimise hassle.
Bangladesh Textile Mills Association urged the government to reduce duties on the import of raw materials for the primary textiles sector.
“We need duty waiver to diversify our products,” said Jahangir Alamin, president of BTMA.
He also called upon the tax administrator to not impose VAT on the supply of cotton between a parent company and its sister concern.
Bangladesh Garments Accessories and Packaging Manufactures and Exporters Association urged the government to allow it to issue utilisation declaration certificates next fiscal year.
In last year's pre-budget discussion, Finance Minister AMA Muhith made a commitment to allow the trade body to issue utilisation declaration certificates to help them cut extra costs and avoid harassment, said Rafez Alam Chowdhury, president of the association. “Why is NBR not complying?”
Md Farid Uddin, member (customs and VAT) of NBR, who presided over the meeting, said they will look into the proposals while preparing the final budget.
Bangladesh is now the second largest garment exporter after China.
Garment exports accounted for 80 percent or $21.5 billion of the country's total overseas sales of $27 billion in fiscal 2012-13, according to Export Promotion Bureau.