The National Board of Revenue (NBR) has withdrawn tax at source on the import of certain cotton and man-made fibres, in what it described as a move to support Bangladesh’s textile and garment sectors by lowering the cost of raw materials.

The order, issued by the Tax Department of the NBR on July 17, stated that tax would no longer be collected at source on a range of fibres commonly used in textile manufacturing.

These include both carded and uncarded cotton, synthetic staple fibres such as acrylic, modacrylic, polyesters, polypropylene, and nylon, as well as artificial staple fibres and man-made fibre waste.

The specific products are identified by their respective Harmonised System (HS) Codes listed in the order.

The NBR clarified that, in the case of certain synthetic staple fibres, the zero percent rate would apply only when the imports are made by VAT-registered manufacturers of such fibres.

The order is to take effect immediately. The NBR expressed hope that the measure would offer relief to fibre importers and textile producers, many of whom have been grappling with rising input costs in recent months.

The garments and textiles industry, a major contributor to Bangladesh’s export earnings, is heavily reliant on imported raw materials such as cotton and synthetic fibres.