Full duty waiver on imports of prefabricated building materials, fire safety equipment, including sprinkler systems, fire doors and emergency lights, set the tone for policies forwarded for the garment sector’s benefit in the budget proposed yesterday.

Finance Minister AMA Muhith also

suggested halving the import duty on textile raw materials like flex fibre to 5 percent from the current 10 percent. The same measure was stipulated for artificial staple fibre as well.

Muhith also recommended a reduction in tax at source on cash incentive to 3 percent from the current 5 percent, effectively increasing the i ncen tive i n cidence.

Tax deduction rate at source on garments export has been reduced from 0.80 percent to 0.30 percent and, for all other exports, the rate has been reduced from 0.80 percent to 0.60 percent to provide a more competitive edge to the export sector.

The minister's proposals received wide appreciation from garment exporters. "The process of factory relocation will be quickened by the government's moves," said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"The budget proposals for dutyexemption on raw material and safety equipment are friendly, and echo our long time demands. If we have continued political stability, our garment exports will reach $50 billion from $22 billion by the end of 2021," Islam said.

President of Bangladesh Textile Mills Association (BTMA) Jahangir Alamin also welcomed the proposal of the government, echoing Islam.

"A reduction in import duty of textile materials and staple fibre will help in product diversification. So more value added items can be produced in the factories, which will in turn help generate more e m p 1 oym en t," Ala m i n sa i d.

"But we had demanded the duty be cut to zero for such raw materials and fibre," he said.

"The proposed industry-supporting moves will help increase our global competitiveness," said Abdus Salam Murshedy, president of Exporters Association of Bangladesh.

"Now garment factory owners will be able to relocate their units more easily,

benefiting from zero-duty on imported prefabricated building materials and other fire safety equipment," Murshedy said.

"We also want soft loans from the government for factory relocation. The international retailers are not increasing the prices for the items. So even small support initiatives by the government will help the sector grow more," said Annisul Huq, former BGMEA president Huq said.

"A single fire door costs Tk 70,000," he said adding that just buying 10 such doors could be potentially back-breaking for any small factory, so zero import duty on such equipment will immensely benefit the sector," he said.

Governments of different countries and international retailers are pressurising the garment makers to install fire safety equipment, and as such, the proposals will help further the industry's growth," said Mohammad Hatem, acting president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

"These have been our long time demands from the government."

Welcoming the government's suggestions for the garment sector, Fazlul Hoque, former BKMEA president, urged the government to give special loans to small and medium factories as they are in a bad shape now.