The National Board of Revenue of Bangladesh has reduced source tax on export proceeds, for all sectors including readymade garment, to 0.25 per cent from 1 per cent. The move follows demand by exporters for the tax slash to make the country’s exports competitive in the international market. The reduced tax rate will remain effective up to June 30, 2020.

Owing to demands from garment makers, the Bangladesh tax authority had reduced advance or source tax on export earnings of garment twice last fiscal year—from 1 per cent to 0.60 per cent and then to 0.25 per cent. However, the reduced rate ended on June 30 this year.

In the first three months (July-September) of the current fiscal year 2019-20, source tax on export earnings at 1 per cent stood at Tk 517 crore from the apparel sector.