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Textile exports

Master circular sought on incentive

Miraj Shams
07 Oct 2021 00:00:00 | Update: 07 Oct 2021 00:53:57
Master circular sought on incentive

Textile and apparel leaders have called for a master circular on cash incentives against textile exports in order for making the process of cash disbursement hassle-free.

The master circular is a compilation of the instructions contained in the circular issued by the authorities concerned.

Currently, the export-oriented textile manufacturers enjoy 4 per cent cash incentives against their exports, and in getting the incentives, the sector people go through a rough patch.

Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan, Bangladesh Knitwear Manufacturers and Exporters Association president AKM Selim Osman, Bangladesh Textile Mills Association president Mohammad Ali Khokon and Exporters Association of Bangladesh president Abdus Salam Murshedy conveyed their demand in writing to the finance ministry as well as to the textiles and jute ministry on September 26.

A copy of the letter was sent to The Prime Minister’s Office, to the Ministry of Commerce and to the Bangladesh Bank.

In the letter, RMG leaders have demanded that the problems relating to the payment of alternative cash assistance be resolved in no time and payment be made directly as per the Freight on Board (FOB) price instead of the one that comes after a series of inspection and audit.

Currently, there is no proper policy or system to set the textile export price.

Traditionally, export good worth Tk 100 is valued up to 80 per cent against which 4 per cent cash incentive is provided.

“Ultimately, we get 3.2 per cent cash incentive if valuation is calculated at 100. That is why we want a fresh Master Circular be issued on the cash incentive,” according to the letter.

Exporters are being harassed due to the ambiguity in the existing circular-25 issued by the central bank on 18 September 2017, it said.

The exporters have to face a wide range of harassment due to complex audit system which creates procrastination over disbursing cash incentive.

The officials of the corresponding banks, audit firms, Bangladesh Bank, local and revenue audit directorate and related government offices set export price at their own sweet will which prevents them to realise proper incentive.

“Cash incentive is given to encourage exporters and help the industry to grow. But a cumbersome process and harassment by the audit officials of several government agencies are making it more difficult for the exporters,” Fazlee Shamim Ehsan, a director of BKMEA told The Business Post.

“To make friendly and reap most benefit, the government should offer the incentive on realised exports earnings. To this end, we are calling for a Master Circular to ease the process.”

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