Wednesday, June 29, 2016

Source Tax at 0.7%: After Brexit, is it enough to cut for Bangladeshi exporters?

As a representative of Bangladesh Knitwear Manufacturers & Exporters Association-BKMEA, at last few weeks along with other apex associations, have advocated strongly to cut down the Source Tax on Export Earnings from proposed 1.5% to 0.6% (http://goo.gl/E8RnSC). And finally, it is appreciatory that the government has decided to lower down the Source Tax to 0.7% (http://goo.gl/d8epIH).

But, as if, for the ‪#‎Brexit‬ matter, buyers from UK, the 2nd largest export destination of Bangladesh in Europe, are now seeking discounts on Bangladeshi garments as pound falls to record low of US$ 1.35 (http://goo.gl/0ajOU9), so that it will be felt irony toward Bangladesh Ready-Made Garment (RMG) exporters, because 90% of the FY 2015-16's earned US$ 3.5 billion have fetched by this single sector from there. 

In this trembled situation, ‪#‎Bangladesh‬ Government should rethink freshly to withdraw entire Source Tax, thus to cut down Source Tax completely to 0% in case of exporting RMG to Europe only, with a view to checkmating the Pound Sterling- Euro Exchange Rate turmoils and compensating the loss in earnings that would held Bangladesh economy healthy. Otherwise, it is going to cause a huge loss in foreign currency earnings from the Europe again, for sure.

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