Addition one percent cash incentives against the exports of apparel goods with the existing incentives will continue for the next year.
Currently, apparel exporters enjoy 4% cash incentives against exports to non-traditional markets. Beyond this, the sector also enjoys a 1% cash incentive to all export destinations.
Finance Minister AHM Mustafa Kamal came up with the projection on Thursday while he was announcing the national budget for the fiscal year 2020-21 in the parliament.
The government has kept on providing all kinds of benefits, including cash incentives, to the readymade garments (RMG) industry as it is the principal export sector of the country.
Again, an additional 1 percent export incentive is being provided to all categories of RMG exports from FY2019-20. However, due to the growing trade tensions and the recession in the world economy, a downturn in global goods trade in 2019 and 2020 has been forecasted.
Therefore, overall exports from Bangladesh, including that of RMG, have continuously been declining.
Due to a reduction in demand in developed countries, RMG export this year is showing a negative trend compared to the previous year. Exports will reduce further in the coming days due to the global lockdown amidst the outbreak of coronavirus, said the minister.
The Minister expects that the RMG industry will see a rebound with the support from the stimulus package being offered by the government to counter the COVID-19 pandemic, and that export will return to the desired positive trend in FY2020-21.
So, I propose to continue with this additional export incentive of 1 percent in the next fiscal year in addition to existing other incentives, said Kamal.