Primary textile and garment accessories manufacturers have urged the government to ensure equal corporate tax treatment with export-oriented ready-made garment (RMG) producers, arguing that they remain at a competitive disadvantage despite being key contributors to the country’s apparel export value chain.

Industry leaders raised the demand while reacting to the proposed FY2026-27 national budget, saying the existing tax structure favours garment exporters and places backward-linkage industries under a significantly higher tax burden.

The Bangladesh Textile Mills Association (BTMA) has requested that the corporate tax rate for primary textile mills be reduced to 12 percent until 2030, matching the concessional rate currently enjoyed by export-oriented RMG manufacturers.

Textile mill owners said local yarn and fabric producers supply a substantial portion of the raw materials used by garment exporters and play a vital role in ensuring shorter lead times, increasing domestic value addition and strengthening Bangladesh’s export competitiveness.

Despite their contribution, they said, textile manufacturers continue to pay higher taxes than the garment factories they support.

“Both sectors are part of the same export supply chain, but they are not receiving the same policy treatment,” said Md Saleudh Zaman Khan Jitu, former vice-president of BTMA.

The association noted that the sector is already grappling with rising gas and electricity prices, high interest rates, escalating raw material costs and weak global demand, and that the current tax regime is discouraging investment in backward-linkage industries.

Garment accessories manufacturers also called for equal tax treatment, saying producers of labels, packaging materials, zippers, buttons, hangers and other accessories face higher operating costs and tax burdens despite directly supporting export earnings.

Industry representatives stressed that strengthening backward-linkage industries has become increasingly important as Bangladesh prepares for graduation from the least developed country (LDC) category and faces growing competition from regional rivals.

According to BTMA, competing countries such as India, Vietnam and Cambodia provide extensive tax incentives and policy support to their textile sectors, enabling them to produce yarn and fabrics more competitively.

The association warned that continued tax disparities could discourage fresh investment, lead to factory closures and increase dependence on imported raw materials, ultimately reducing domestic value addition in the country’s apparel exports.

BTMA President Showkat Aziz Russell said textile mills and accessories manufacturers are integral parts of Bangladesh’s export ecosystem and deserve policy support comparable to that provided to apparel exporters.

Industry leaders said ensuring tax parity across the entire apparel value chain would help sustain production, protect jobs, promote local sourcing and strengthen Bangladesh’s competitiveness in the global market.