Why RMG sector still benefitting from reduced tax rate after 5 decades? NBR chairman wonders

National Board of Revenue (NBR) Chairman Abdur Rahman Khan questioned why the ready-made garment (RMG) sector continues to enjoy a reduced tax rate even after 50 years, while most other sectors pay the standard tax rate.

"Why does the garment sector pay only 12% in taxes? After 50 years, why do you still need this benefit?" Khan asked these questions during a pre-budget meeting at the NBR headquarters in Agargaon, Dhaka, today (20 March).

He further stated, "While others pay the regular tax rate, why are you reluctant to do the same?"

Khan urged exporters to transition to the standard tax rate, adding, "If you incur losses, you are not required to pay taxes. You will only pay taxes based on your profit."

"We must move away from tax exemptions," he emphasised.

Currently, the RMG industry pays a 1% source tax on export value. When filing tax returns, garment and textile industries are taxed at 12%, while green factories receive a reduced rate of 10%.

Anwar-Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries and former President of the Bangladesh Garment Manufacturers and Exporters Association, countered this argument. He stated, "We have to pay taxes even if we incur losses."

In his written proposal, he urged the government to cut the export tax rate by half from the current 1%.

Expressing concern over the current law and order situation, he questioned, "What is the benefit of paying taxes? What is the state of safety and security? Children are even afraid to leave their homes."