Bangla Apparel Makers Pay 645% Higher Undocumented Payments

Garment manufacturers from Bangladeshi pay up to 645 percent more than the official fees for renewal of licences or secure essential permits.

The 645 percent higher charges are ‘undocumented payments’, a study by the Centre for Policy Dialogue (CPD) said.

Quoting data from an exporter, the study informed that the company paid 645 percent higher than the official rate for a boiler licence.

For a fire licence, the cost was 114 percent more and for bond licences, the company paid 261 percent higher than the official fees.

The study added that the amount was 16 percent higher for a trade licence, 12 percent more for export and import registration certificates and was higher by 36 percent for a factory establishment licence.

“Companies frequently come across unofficial fees, which leads to financial strain and irregularity in operational expenses,” Khondaker Golam Moazzem, Research Director at CPD said.

“These undocumented payments are necessary to speed up the licensing process and in the process create compliance and ethical dilemmas,” he added while presenting the study.

CPD found high levels of corruption impacting businesses, with 100 percent of large companies, 66 percent of medium-sized companies and 61 percent of small & micro enterprises calling it a major issue.

Moazzem further said that around 58 of companies reported that bribes are common in awarding of licences and public contracts.