Finance Minister AHM Mustafa Kamal has proposed an extension of the existing reduced 15% corporate tax for the textile sector for another three fiscal years, subject to its compliance with some conditions.
While presenting the budget proposal for FY2022-23, he said that the prevailing tax rate for the textile sector stands at 15%, and the Statutory Regulatory Orders (SROs) to this effect expires on 30 June 2022.
"I propose to extend the date of the SRO up to 30 June 2025. I believe the valued taxpayers will take advantage of such long-term preferential tax rate and will properly pay their due taxes", said the minister.
If they have paid any penalty slapped by any government authorities for violation of environmental rules and regulations, that fiscal year they have to pay a regular tax rate. The extension will be effective from 1 July this year and will remain in effect until 30 June 2025.
The finance minister said, "Globally Bangladesh has retained second position in export of RMG. The revenue policy incentive of the government geared towards this industry has been the major driving force behind making this industry globally competitive."
Previously, Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon told requested that the government continue this facility till 2030 to deal with post-LDC challenges.
Envoy Textile Chairman Kutubuddin Ahmed previously told TBS such an extension to the reduced tax rate is not enough. The sector's total tax burden is higher as they have to pay source tax that is not adjustable with the corporate tax.
Finance Minister AHM Mustafa Kamal has placed the Tk678,064 crore national budget for FY23 at Jatiya Sangsad with top priority to safeguarding marginal people from inflation fuelled by the Russia-Ukraine conflict.
This is the fourth budget of the third consecutive term of the government led by Prime Minister Sheikh Hasina and also the overall 51st budget of the country.
The proposed budget is Tk74,383 crore higher than the original budget size of the FY2021-22 fiscal year, which was Tk603,681 crore.