BGMEA welcomes budget, demands 5 key policy changes for garment sector
The apparel industry body has also urged the government to incorporate five key demands that it says were not addressed in the budget.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has welcomed the proposed national budget for the FY2026-27, describing it as broadly business-friendly and reform-oriented.
However, the apparel industry body has also urged the government to incorporate five key demands that it says were not addressed in the budget.
In a statement issued today (13 June), BGMEA said the proposed budget includes several positive initiatives such as policy stability, digitalisation of the tax system, simplification of business startup procedures, incentives for renewable energy, modernisation of the bond and VAT systems and tax benefits for SMEs and women entrepreneurs.
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The association said these measures send a positive signal for industry and investment amid global and domestic economic challenges.
BGMEA noted that the ready-made garment (RMG) sector is currently facing significant pressure due to global slowdown and rising production costs.
According to the organisation, during the current fiscal year, export earnings from RMG declined by 3.41%, average unit price fell by 1.55%, and back-to-back L/C openings for raw material imports dropped by 7.93%. It also claimed that around 400 factories have shut down over the past three years.
Against this backdrop, BGMEA placed five key demands before the government.
The demands include reducing the export source tax on garments from 1% to 0.65% and keeping it stable for the next five years; fully waiving the 10% tax deduction at source on cash incentives instead of the recently reduced 5%; and removing the 1% double source tax on subcontract values, along with simplifying VAT exemption procedures for small and medium factories.
The association also called for ensuring that the 12% corporate tax rate for the garment sector and 10% rate for green factories are not increased due to other income sources.
BGMEA also demanded withdrawal of proposed additional import duties on polyester staple fibre (PSF), PVC resin and PET resin, considering the growing potential of man-made fibre-based garment exports.
The association said that after Bangladesh's graduation from the Least Developed Country (LDC) category, reducing production costs, ensuring affordable energy supply, and further simplifying customs and port procedures are essential to remain competitive in the global market.
