RMG leaders urge govt for exemption from BB directives on power, gas and loans

Ready-made garment (RMG) industry leaders have urged the government to exempt the garment industry from the directives of two recently issued circulars of Bangladesh Bank for at least five years and reiterated the demand for uninterrupted power and gas supply.

The call came during a meeting held at Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Complex today (9 May), said a press release. 

BGMEA President SM Mannan (Kochi) presided over the meeting which was attended by BGMEA, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Bangladesh Textile Mills Association (BTMA), and also the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

The issued circulars stated that no electricity and gas connections would be provided to new factories if they are established outside the government-designated economic zones or industrial areas. Moreover, banks were directed to ensure mandatory clearance certificates from utility service providers before approving loans. 

The leaders expressed concern that as the garment industry is at crossroads due to the current geopolitical crisis causing disruptions in global trade, the implementation of the circulars would aggravate the crisis of the garment industry, hindering its growth and discouraging entrepreneurs from setting up new factories. 

They highlighted that many garment factories established outside the designated economic zones or areas are undergoing expansion, and new factories are under construction. So, implementing the circulars at this point would disrupt ongoing expansion works and new establishment efforts, they added.

The issues related to customs, VAT, and income tax in the garment industry were also discussed in the meeting. 

The business leaders urged the National Board of Revenue (NBR) to make customs, VAT, bonds, and tax-related processes faster, easier and hassle-free to facilitate sustainable industry development, aiming to achieve the target of $100 billion from garment exports by 2030. 

They proposed reducing the tax at source applicable to the garment industry from 1% to 0.5% to mitigate the increased costs of doing business and maintain competitiveness. They also said that they were hopeful that their demands would be considered in the upcoming budget. 

The meeting was attended by BKMEA Executive President Mohammad Hatem, BTMA President Mohammad Ali Khokon, FBCCI Vice President Md Munir Hossain, BGMEA Vice President (Finance) Md Nasir Uddin, Vice President Abdullah Hil Rakib, directors Md Imranur Rahman, Mohammad Sohel Sadat, Shams Mahmud, Rajiv Chowdhury, Md Jakir Hossain, and Md Rezaul Alam (Miru).