The time for a reduced value added tax (VAT) rate for the import, production, and supply of edible oil, has been extended for three months, till 31 December.
The reduced VAT rate will be considered effective from 1 October, said a statutory regulatory order (SRO) issued by the finance ministry on 4 October, which was published yesterday.
According to the SRO, VAT on edible oil has been reduced from 15% to 5% and there is no VAT at the production and supply stages.
Previously, VAT on edible oil was 15% at the import level, 15% at the production stage, and 5% at the supply stage.
Meanwhile, the commerce ministry yesterday announced a decision to cut the price of palm oil by TK8, to TK125 per litre at the retail consumer level.
The government slashed VAT on edible oil for three months in March this year as its price was increasing rapidly. At that time, the price of soybean oil in local markets had shot up to over Tk200 per litre. After reducing VAT, the price of the essential product came down slightly.
At the end of the initial period of implementing the reduced VAT in early July, the government extended the facility for another three months, till 30 September. With the latest SRO, importers, refiners, and suppliers will enjoy the benefit until 31 December this year.
In a letter sent to the finance ministry on 20 September, the commerce ministry requested the reduced rate to be extended to June 2023.
Following reduced edible oil prices on the international market, and the Bangladesh Trade and Tariff Commission's recommendation, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association cut the price of soybean oil by TK14, to Tk178 per litre, on Monday.