Bangladesh Will Increase The Tax Rate Of The Garment Sector And Increase The Contribution Rate Of The Garment Industry.

Bangladesh's National Tax Committee (NBR) proposes to raise the tax rate of the garment sector and gradually increase the tax rate of the garment sector to the same level as other industries.

Last year, Bangladesh

It reached US $18 billion, accounting for nearly 75% of the country's total exports.

However, compared with other industries,

The contribution to the State Treasury is low, while the clothing industry enjoys moderate tax rate.

In 1980s, the government granted duty-free treatment to the garment industry in Bangladesh to promote the development of the garment industry.

Duty-free treatment lasted for 20 years, and only 0.25% of export revenue was collected until 2004-05.

Then, in fiscal year 2010-11, the tax rate rose to 0.4%, and the tax rate for the garment industry increased to 0.6% this year.

The government is now planning to increase the clothing export tax to 1.2% in the 2012-13 fiscal year (beginning in July 1, 2012).

There are more than 5000 families.

Manufacturing enterprises employ more than 3 million 500 thousand employees.

With China's withdrawal from the garment industry and its support for value-added industries, Bangladesh has positioned itself as the next low-cost manufacturing hot spot.

According to McKinsey's research on European and American garment buyers and domestic suppliers, Bangladesh still has to overcome some obstacles in order to become the focus of global procurement in the next 10 years.

The rise in labor costs and its currency in mainland China will make China less competitive in labour intensive industries.

At present, there is a trend of moving from the southern part of China to other Asian countries, including buyers in mainland China.

McKinsey predicts Bangladesh's potential for rapid growth in the garment industry, making it the next hot spot.

In McKinsey's report, the results of intensive research on policy makers and staff in the entire value supply chain are analyzed, including major foreign buyers, local suppliers and governments.

The growth of Bangladesh will not be confined to the low cost garment industry. Buyers' demand will also drive the industry to more sophisticated projects and more diversified products in the upper and middle reaches.