This sector, a crucial part of the readymade garment (RMG) industry, also requested a three-year provision for import availability.

Md Al Shahriar, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) outlined these demands in their budget proposals for FY25 even as he underlined that while tariff area bonded establishments face no import restrictions, non-tariff area establishments do, causing delays in audit completion even after submitting necessary documents.

This results in a requirement for bank guarantees at ports, complicating the operations of businesses relying on local raw materials and increasing production costs.

Such discrepancies create unfair competition between bonded establishments in tariff and non-tariff areas and therefore, equalizing import availability is essential to maintain a level playing field, he felt.

The BGAPMEA emphasised that 15 per cent -18 per cent of the apparel industry's marginal product cost is linked to accessories, affecting overall production costs. The accessories sector currently meets nearly 100 per cent of the domestic demand for the country’s major export-oriented apparel sector and is also a significant exporter.

To support the RMG sector’s capacity and reduce production costs, BGAPMEA proposed several other measures, including advocating for continuous bond facilities for their 100 per cent export-oriented member industries, akin to other trade associations, and urged the exclusion of all local purchases of export-oriented industries from the current 15 per cent VAT.

The apparel accessories makers also requested a reduction in the source tax on all exports from 1 per cent to 0.25 per cent for the next five years, citing past reductions to encourage exports.

Additionally, BGAPMEA demanded a reduction in tax at source on bank interest income from 20 per cent to 10 per cent and an increase in the tax-free income threshold to boost revenue.

To protect the domestic industry and maintain competitiveness in the international market, they also called for a ban on importing finished garment accessories and packaging products under the bond.

Fibre2Fashion News Desk (DR)