Readymade garment manufacturers have a tendency to either reveal their purse to the revenue board and pay a 30 percent corporate tax plus a 15 percent value-added tax on labor and raw materials for the subcontract, or bury the income and pay nothing.
Export-oriented clothes face a 12 percent corporate tax, whereas green industries face a 10% tax.
For apparel subcontractors, the rate can be as high as 30%. Apparel exporters do not have to pay VAT on their purchases, but subcontractors must pay a 15% VAT. There are about 500 subcontracting factories, and their output accounts for 15% of total export.