The International Labour Organisation has urged the government to waive around $1 million value-added tax generated from the spending on a project involving the readymade garment factory inspection, officials said. The ILO made the appeal to the finance ministry through the labour and employment ministry saying that development partners were giving $7.5 million for the purpose of factory inspection.
But they are not willing pay the VAT, said the officials quoting the letter.
The government has taken a three-and-a-half-year initiative under the ILO’s programme for ‘improving working conditions in the readymade garment sector’ to ensure fire, electrical and building safety.
The collapse of Rana Plaza with the death of 1,136 garment workers in April 2013, less than six months after a fire at Tazreen Fashions on November 24, 2012, resulted in the urgent need for Bangladesh’s 3,500 RMG units to be checked for structural and fire safety.
A team comprising teachers of Bangladesh University of Engineering and Technology has been appointed for the inspection job of more than 1,500 RMG factories after the inspection of 1,800 factory buildings.
The ministry officials said the ILO hinted at further investment by the development partners from countries like the UK, Japan and Canada for repairing faults at the factory buildings.
The further investment depends on a waiver of the VAT, said the officials adding that the factory compliance issue was also linked with the demand for duty-free access of the RMG products to the US market.
The US has already scrapped duty advantage under the generalised system of preference a few Bangladeshi products enjoyed in the same market since June 2013.
RMG has been the mainstay of the country’s export. It accounted for about 80 per cent of the $30.18 billion exports of the country in the last fiscal year. RMG products worth $24.48 billion were shipped out.
Nearly 4,000 RMG factories in Dhaka and Chittagong have employed over four million workers, mostly women. The export target of the RMG for woven garment in the current fiscal has been set at $29 billion.
Early last month, a joint meeting of the stakeholders aimed at setting a unified code of conduct in the light of National Action Plan to ensure effective inspection system for all parties concerned was held.
Labour secretary Mikail Shiper said the meeting was successful as a consensus was reached to set up common standard for the inspection.
The government officials, the representatives of EU Accord on Fire and Building Safety in Bangladesh and North American Alliance for Bangladesh Worker Safety, Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, Fire Service and Civil Defence, RAJUK, BUET and Public Works Department attended the meeting.
-With New Age input
