The Bangladesh Textile Mills Association (BTMA) has called for the withdrawal of taxes on export incentives, warning that the current taxation framework is placing significant pressure on the country’s textile and export-oriented industries.
Presenting proposals at a pre-budget meeting at the National Board of Revenue (NBR) headquarters in Dhaka, BTMA President Shawkat Aziz Russell said taxing incentives undermines their fundamental purpose of supporting exporters.
He proposed reducing the tax at source on export earnings from 1% to 0.5% and scrapping the existing 10% advance income tax on export subsidies. He also criticised the multi-layered tax structure, where levies are applied at different stages of production but cannot be adjusted or carried forward, increasing the overall financial burden on businesses.
According to BTMA, cumulative taxation across the value chain—from cotton to yarn, fabric, and finished garments—pushes the effective tax burden to between 12% and 14%, weakening Bangladesh’s competitiveness in global markets.
Russell also highlighted the country’s slow progress in man-made fibre (MMF)-based production, noting that nearly 70% of global apparel now relies on synthetic fibres. He urged policymakers to remove duties on key raw materials and extend bonded warehouse facilities to accelerate the sector’s transition.
Among other recommendations, BTMA called for simplifying solar panel imports by unifying multiple HS codes, ensuring monthly refunds of VAT and advance taxes for exporters, and offering tax exemptions on liquefied petroleum gas (LPG) to help reduce energy costs.
Responding to the proposals, NBR Chairman Md Abdur Rahman Khan said several digital reforms—such as online corporate tax return submissions—have already been introduced to ease compliance. He added that policy support, including incentives for the solar energy sector, is being expanded.
The association also raised concerns over inconsistencies in the valuation of imported fabrics, urging authorities to assess duties based on actual import values to ensure greater transparency and fairness in the system.
Industry stakeholders believe that addressing these tax-related challenges will be critical to sustaining export growth and strengthening Bangladesh’s position in the global textile and apparel market.
