[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

RMG’s reduced corporate tax won’t last long: NBR chairman

The current reduced corporate tax rates of 10 to 12 percent for the readymade garment (RMG) sector may not last much longer, said National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan.

www.thedailystar.net

RMG’s reduced corporate tax won’t last long: NBR chairman

Star Business Report

The current reduced corporate tax rates of 10 to 12 percent for the readymade garment (RMG) sector may not last much longer, said National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan.

Speaking at a pre-budget meeting with stakeholders at the NBR headquarters in Agargaon today, Khan signalled a gradual return to the standard corporate tax rate of about 27.5 percent.

Export-oriented knitwear and woven garment manufacturers, along with green-certified factories, currently enjoy lower corporate tax rates of 10 percent and 12 percent, respectively. These incentives are designed to boost exports and encourage sustainable industrial practices.

However, Khan said these incentives are temporary and could be removed as part of wider tax reforms to ensure fairness.

“Such reduced rates won’t last long,” he said during a discussion at the meeting with the Women Entrepreneurs Network for Development Association (WEND) on corporate tax incentives for women-led businesses.

He added that exporters already enjoy a 50 percent income tax exemption on export earnings, which greatly lowers their actual tax burden. For example, with the standard corporate tax rate at 27.5 percent, the exemption reduces the effective rate to about 12 percent.

Nadia Binte Amin, president of WEND, suggested equalising corporate tax rates and reducing the 1 percent tax deducted at source (TDS) on export earnings for fully women-owned businesses.

She also proposed a 10 percent tax rebate for companies investing in research and development, innovation, training, and sustainable development.

AMCHAM PROPOSALS AHEAD OF BUDGET

The American Chamber of Commerce in Bangladesh (AmCham) shared its budget recommendations at the meeting. They proposed rationalising the current 1 percent minimum tax on annual turnover.

Khan responded that there is pressure to increase, not reduce, the minimum tax.

AmCham also suggested maintaining a level playing field in the banking sector by applying a uniform 37.5 percent tax rate to both foreign and local commercial banks.

Additionally, they recommended lower tax rates for Offshore Banking Units (OBUs), similar to other Asia-Pacific countries, where rates range from 0 to 20 percent.

“These measures would attract more foreign direct investment, improve exporters’ competitiveness, and increase overall investment and revenue,” said AmCham President Syed Ershad Ahmed.

Other proposals included reducing the supplementary duty on carbonated and sweetened beverages from 30 percent to 15 percent, simplifying procedures under Double Taxation Avoidance Agreements (DTAA), speeding up certification processes, introducing a standard foreign currency conversion method in line with international practices, and rationalising withholding tax rates.

AmCham also highlighted the need to promote digital financial inclusion and support sustainable industries. Their recommendations included lowering duties on smart cards and POS machines, offering incentives for digital payments, rationalising minimum tax rates, and creating a fully digital, time-bound tax refund system.

The meeting was attended by representatives from several business chambers, including EuroCham Bangladesh, Bangladesh-China Chamber of Commerce and Industries, and India-Bangladesh Chamber of Commerce and Industry, who shared their proposals ahead of the 2026-27 fiscal year budget.​

 

[Saif]

Chasing the American dream

The United States (US) is the primary destination for Bangladeshi exports, especially readymade garments (RMG), accounting for one-fifth of total apparel exports. On April 2 last year, the largest export market faced a setback due to President Donald Trump's reciprocal tariffs. Consequently, in the

thefinancialexpress.com.bd

Chasing the American dream
Are we sacrificing European export stronghold

Mohammad Esha

Published :
Apr 08, 2026 23:47
Updated :
Apr 08, 2026 23:47

The United States (US) is the primary destination for Bangladeshi exports, especially readymade garments (RMG), accounting for one-fifth of total apparel exports. On April 2 last year, the largest export market faced a setback due to President Donald Trump's reciprocal tariffs. Consequently, in the first six months of fiscal year 2025-2026 (FY26), exports declined every month except July. The growth rate was 12.84 per cent in FY25 but dropped by 2.19 per cent in the first half of FY26. December alone saw a sharp 14.25 per cent decline. Exports continued falling for eight months, with January down 0.50 per cent and February down 12.03 per cent.

The Trump administration's reciprocal tariff is not the sole reason for this negative trend. A more significant factor is that importers and buyers are waiting for a stable democratic environment, specifically an elected government and a peaceful political atmosphere.

The good news is that on February 9, 2026, Bangladesh signed an Agreement on Reciprocal Tariff with the US. Under the agreement, the reciprocal tariff has been reduced to 19 per cent. A major achievement is zero tariff on exports of garments made using cotton and synthetic fibres imported from the US. The US produces the world's finest quality cotton. While we also import cotton from Brazil, Australia, Mali, Benin, Burkina Faso, and India, US cotton is slightly more expensive. The zero-tariff facility on finished products will make us more profitable. Since 54 per cent of Bangladesh exports are knitwear produced from natural cotton, using US cotton will unlock this zero-tariff advantage. The time has come to capitalise on this.

Europe remains a massive market for Bangladesh, accounting for half of our total garment exports. However, the recent India-EU Free Trade Agreement (FTA) has raised concerns about maintaining Bangladesh's position. This agreement between India and the 27 EU nations covers two billion people and about 25 per cent of global GDP. Under this deal, 144 Indian sub-sectors, including garments, textiles, leather, and footwear, will gain duty-free access to the EU. Bangladesh currently enjoys GSPEBA (Everything But Arms) facilities in the EU, which will continue until 2029 even after LDC graduation this November. We must prepare now for the GSP-Plus transition after 2029.

Even before the FTA with the EU, when the US imposed a 50 per cent reciprocal tariff on Indian goods, India took steps to boost exports to Europe. Indian government and textile representatives approached major European buyers such as Inditex Group (Zara), Polish LPP, German Aldi and Lidl, and French Auchan and C&A Netherlands, offering garments at lower prices. Similarly, China began supplying low-cost garments to the EU to offset shocks in the US market. As a result, the unit price of Bangladeshi garment products in the EU dropped by 3.84 per cent in 2025.

There has been long-standing talk about export diversification, but specific planning and development are lacking. Seventy per cent of our garment exports are cotton-based, while nearly 70 per cent of global apparel is made from MMF (Man-Made Fibre) or synthetic materials. Now is the time to leverage the zero-tariff facility by exporting MMF or synthetic garments to the US using American raw materials.

Beyond traditional European and American markets, we must expand exports to new destinations like the Gulf countries, Japan, Korea, Australia, New Zealand, and Latin America. The recently signed Bangladesh-Japan Economic Partnership Agreement (EPA) is a landmark deal that must be fully utilised. Under this agreement, 99.9 per cent of Bangladeshi products receive zero-duty access to Japan.

So, we remain optimistic that despite all adversities, Bangladesh will soon achieve its cherished goal of $100 billion in garment exports.

Mohammad Esha is Deputy Managing Director, Pubali Bank PLC​

 

[Saif]

BGMEA seeks uninterrupted energy supply

The country’s readymade garment manufacturers on Monday sought the government’s support to ensure an uninterrupted energy supply for the RMG sector.

www.newagebd.net

BGMEA seeks uninterrupted energy supply
Staff Correspondent 13 April, 2026, 22:51

The country’s readymade garment manufacturers on Monday sought the government’s support to ensure an uninterrupted energy supply for the RMG sector.

They sought support when a delegation of leaders from the Bangladesh Garment Manufacturers and Exporters Association met with the Minister for Power, Energy, and Mineral Resources, Iqbal Hassan Mahmood, and state minister Aninda Islam Amit at the ministry.Bangladesh travel

According to a press release, during the meeting, the BGMEA president Mahmud Hasan Khan Babu said that although buyer confidence has started to restore following the recent general election, the ongoing Middle East conflict has once again posed challenges to the global market.

He also said that neighbouring countries are ahead in energy security and that the current energy situation triggered by the conflict has put Bangladesh’s garment industry in a vulnerable position, according to a BGMEA press release here.

‘Due to insufficient gas and electricity supply, production capacity in factories has declined by 25–30 per cent,’ he added, placing several key proposals.

The trade body urged that a prompt diesel supply be ensured to garment factories from nearby filling stations under special arrangements.

It also urged the government to provide urgent gas connections, especially for small and medium industries (with boiler capacity of 300–500 kg), and ensure equitable gas distribution across industrial zones surrounding Dhaka.Maps

Installation of at least two additional Floating Storage Regasification Units at the earliest and simplification of the process for installing EVC meters at industries is a must, said BGMEA president.

The association also demanded the withdrawal of import duties and consumer-level taxes on imported fuel to reduce production costs and lessen the government’s subsidy burden.

The meeting also emphasised the importance of renewable energy.

BGMEA requested special tariff concessions on the import of solar PV system components to promote environmentally sustainable industrialization.

The association proposed reducing the existing high duties (ranging from 28.73 per cent to 61.80 per cent) on essential equipment such as solar panels, inverters, DC cables, and Battery Energy Storage Systems (BESS) to 1 percent.

The minister and the state minister listened attentively to the proposals and assured that necessary steps would be taken, considering the vital contribution of the RMG sector to the national economy, said the press release.

They also acknowledged BGMEA’s proposed format to facilitate emergency diesel supply from nearby filling stations.

BGMEA first vice-president Selim Rahman and vice-president (finance) Mizanur Rahman, and energy secretary Mohammad Saiful Islam were also present at the meeting.​