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Abuse of bond facility by apparel units


THE contribution of the export-oriented apparel sub-sector to the national economy is undeniable. It fetches more than 70 per cent of the country's annual export income and employs about 1.5 million people, 90 per cent them being females. In addition, the success of the apparel industries has helped emergence of a strong backward linkage industries over a period of one and a half decades. It has also contributed to the recent remarkable rate of capacity expansion of the textile and spinning mills. In sum, the export-oriented apparel units have brought about an immense social and economic transformation in Bangladesh.
In recognition of the contribution of the apparel sub-sector, the government in 2001 approved 5.0 per cent cash incentives for the 100 per cent export-oriented woven garments and knitwear producing garments. It needs to be appreciated by all concerned that a resource-strapped country, which is very much dependent on external doles for the development of its infrastructures and social sectors, has at least tried to encourage its entrepreneurs within its limited ability. But it is disheartening to note that a section of owners of apparel units have been abusing the bond facility to avail themselves of the cash incentives unduly. A report carried by this paper Monday revealed that a probe team of the National Board of Revenue (NBR) had identified at least 20 apparel units that had embezzled government cash incentives amounting to Tk. 173 million. No apparel unit owner can indulge in such a white collar crime unless he or she gets support from the banks concerned. Here also some dishonest officials of two private banks had been involved in the mischief. The NBR since the year 2000 has cancelled bond licences of about 1300 apparel units for their alleged involvement in fraudulent practices. According to unofficial estimates, the government has to incur losses around Tk 2.0 billion a year due to abuse of bond facility by the apparel owners.
Allegations are galore that woven garments in particular have been abusing bonded warehouse facility to sell in the local market the fabrics and other accessories imported duty-free. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) which has been demanding central bonded warehouse facility is yet to deny strongly these allegations. The propensity to evade tax and duties and avail government incentives using wrong routes among a section of industrialists and businesses is quite high. The business leaders very often accuse the politicians and bureaucrats of corruption and wrongdoings. They also need to do something to check the mischief-mongers with in their own community. Why should all in the private sector take the blame for a few dishonest people?
In a land where corruption is rather systemic, no sector, including the media, can claim itself to be fully clean. What is more distressing is that in spite of all the campaigns and actions---though more of cosmetic nature--- against it, corruption and irregularities are showing no sign of abatement. But should the nation be allowed to plunge into an abyss of endless corruption and truly become a failed state? It is time for the majority who are honest and sincere to cleanse things at their respective places. The business community should not be an exception.