The Bangladesh Textile Mills Association (BTMA) has welcomed the National Budget 2026–27, viewing its emphasis on investment, production, employment generation, export competitiveness, and ease of doing business as a positive step for the country’s industrial development.
In particular, measures aimed at protecting local industries, enhancing competitiveness, restructuring the tariff framework, facilitating the use of solar energy, and simplifying business processes are expected to benefit the primary textile sector.
According to BTMA, several of its key recommendations have been partially incorporated into the proposed budget.
These include reducing the Advance Income Tax (AIT) on export cash incentives from 10% to 5%, lowering the tax rate on recycled products and raw materials from 3% to 1%, treating withholding tax as an advance tax rather than a minimum tax, introducing provisions for the refund of excess withholding tax, reducing withholding tax on cotton supplies from 1% to 0.5%, and granting zero-duty and tax facilities on the import of key solar power equipment.
The budget also proposes the introduction of a minimum value for fabric imports, withdrawal of taxes on solar energy-related products, and extension of duty exemptions on chemicals used in Effluent Treatment Plants (ETPs) until June 30, 2027.
In addition, provisions for establishing Free Trade Zones under the Customs Act and initiatives to revive closed textile mills have been praised by the association.
However, BTMA president Shawkat Aziz Russell expressed concern over the proposed withdrawal of the existing 30% value-addition requirement for raw material imports under bank guarantees.
The association believes that removing this condition could create risks for domestic industries and increase the possibility of misuse. Given the challenges Bangladesh will face in the post-LDC graduation environment, BTMA argues that the current value-addition requirement should remain in place.
He also stressed the need to reduce the corporate tax rate for the textile sector to 15% to help address the industry’s ongoing challenges.
The association noted that the primary textile sector is currently under pressure from high energy costs, uncertainty in gas and electricity supplies, elevated bank lending rates, volatility in raw material prices, withholding tax burdens, shortages of working capital, and growing international competition.
In this context, BTMA emphasized the importance of ensuring stability in income tax and withholding tax policies, providing policy support for the import of raw materials and machinery, facilitating investment, and maintaining long-term predictability in tax policies for backward linkage industries.
BTMA expressed confidence that effective implementation of the budget through close collaboration between the government and the private sector would enable the primary textile sector to attract new investments, create employment opportunities, expand import-substituting production, and contribute more significantly to export earnings.
The association reaffirmed its commitment to working constructively with the government to build a competitive, energy-efficient, sustainable, and globally compliant textile value chain.