The government on Sunday reduced rates of cash incentives against exports for all 43 categories up to 50 per cent for the financial year 2024-25 that begins today.
The Bangladesh Bank in a circular said that the government has decided to reduce the cash incentives against exports gradually as after the graduation of the country from the least developed status in 2026, the export subsidy would be prohibited under the provision of the World Trade Organisation.
Exporters opposed the reduction of cash incentives saying that it would hurt the export sectors heavily.
The new instructions on the export subsidy will remain effective from July 1, 2024 to June 30, 2025.
As per the BB circular, additional incentives for products made with local yarns and fabrics have been halved to 1.5 per cent and additional 3 per cent cash incentives against exports to Eurozone have been reduced to 0.5 per cent.
Special cash incentives against exports of readymade garment products have been reduced to 0.3 per cent while the export subsidy for the new markets has also been decreased to 2 per cent from 3 per cent.
The circular also said that ready-made garments made from man-made fibre would avail this incentive either on new products or new markets.
The circular showed that cash incentives against the exports of leather products are reduced to 10 per cent from 12 per cent.
Exports of diversified jute products will get 10 per cent cash incentive instead of 15 per cent, exports of jute yarn and twine will enjoy 3 per cent instead of 5 per cent and that of jute hessian, sacking and carpet backing cloth will get 5 per cent instead of 7 per cent incentive.
Information technology-enabled services will get 6 per cent cash incentive in place of 8 per cent.
Exporters of frozen fish would get 3.5 per cent cash incentive for their products covered with ice weighing a maximum of 20 per cent of the total weight, 2.5 per cent cash incentive for products covered with ice weighing 20 to 30 per cent of the weight, 2 per cent cash incentive for products covered with ice weighing 30 to 40 per cent of the weight and 1.5 per cent cash incentive for products covered with ice weighing 40 per cent and above of the weight.
Exporters of shrimp will get 8 per cent cash incentive if their products are covered with ice weighing up to 20 per cent of the total weight.
The shrimp exporters will get 7 per cent cash incentive for their products which are covered with ice weighing 20 to 30 per cent of the weight, 6 per cent cash incentive for products covered with ice weighing 30 to 40 per cent of the weight and 4 per cent cash incentive for products covered with ice weighing 40 per cent and above of the weight.