Bangladesh's increase in source taxation may affect the ready-to-wear and jute product sectors, triggering a drop in exports, the trade group warned in June. In the next two months, Bangladesh’s ready-made garment exports will decline, said the Bangladesh National Garment Manufacturers and Exporters Association (BGMEA). Lobbying organizations predict that exports will decline. They say that a 1.5% increase in source tax revenue will increase 7.5% in the cuts and manufacturing of the knitwear and weaving sectors. In the first 10 months of the current fiscal year, the garment export of Bangladesh increased by 42.30%. But the Bangladesh National Garment Manufacturers and Exporters Association said that due to high interest rates, labor costs rising by 80%, and fierce international competition, Bangladesh’s exports may eventually decline. The Bangladesh National Garment Manufacturers and Exporters Association requires a 0.25% source tax, which was implemented from fiscal year 2009-10 but replaced by a 1.5% source tax in the new budget.
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