The government has slashed the import duty on boiled and non-boiled Atap rice to 25% from the existing 62.5% to rein in soaring prices of the food staple in the local market.
The reduced import duty will be in effect until 30 October this year, said a circular issued by the National Board of Revenue (NBR) on Thursday.
According to the new circular, importers of Atap rice will have to pay 5% advance tax (AT) and 5% advance income tax (AIT) in addition to 15% customs duty.
Apart from Atap rice, imports of Basmati or any other type of rice will be subject to the usual 62.5% tariff.
In the wake of surging rice prices, the government earlier reduced the import duty on rice to 25% in December last year and the facility expired in April last. After that, rice had to be imported from May by paying 62.5% duty as usual.
On 6 July, the food ministry sent a letter to the NBR requesting it to reduce tariffs on rice imports.
'Unprecedented demand pressure on rice'
Food Minister Sadhan Chandra Majumder on Thursday said the market pressure and demand for rice is now unusually high, driven by the food needs of more than one million Rohingyas and the large number of expatriates who have returned home to Bangladesh.
After visiting the Shantahar Central Storage Depot in Bogura on Thursday, the food minister said the government has decided to import rice to ease the pressure and protect the interests of consumers and farmers.
At present, the government's rice stock is 17 lakh tonnes. With the ongoing Boro procurement programme, 8 lakh tonne rice has already been collected. The rice procurement time has been extended till 31 August – by then the procurement is expected to be completed. Further steps are being taken to stabilise the rice market. Besides taking action against illegal stocking and hoarding, private sector rice imports are also underway. Everyone will reap the benefits soon, he added.
The minister said, "Before I took charge of the food ministry, rice was imported privately in the country tax free and anyone could import. The supply of imported rice in the market was higher and the price also went down. As a result, domestic farmers had no choice but to sell paddy at a low price in keeping with open market prices. Soon, marginal farmers lost interest in paddy cultivation and started cultivating other crops."
He added that a 62.5% tax was imposed on rice imports to ensure that farmers were not harmed and to discourage imports. The main objective was to re-engage farmers in paddy cultivation and to increase the country's home grown food stocks through local procurement. The present government is now benefiting farmers by procuring paddy from them at reasonable prices that can sustain farmers.
Notably, end consumers did not benefit from the just-ended Boro season. People are having to buy rice at higher prices in the market. One has to spend up to Tk52-53 to buy one kilogram of coarse rice. To regulate and manage the market, the government has decided to allow the private sector to import rice. However, the amount of rice to be imported has not been finalised yet.