FBCCI for import duty cut to fit in post-LDC trade regime
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Monday
February 06, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
MONDAY, FEBRUARY 06, 2023
FBCCI for import duty cut to fit in post-LDC trade regime

Economy

Reyad Hossain & Abul Kashem
10 November, 2021, 03:00 pm
Last modified: 10 November, 2021, 04:15 pm

Related News

  • FBCCI, ApexBrasil sign agreement to boost bilateral trade cooperation, investment
  • FBCCI seeks PM's directives on not increasing gas price over 57%
  • FBCCI urges NBR to increase ease of doing business
  • FBCCI invites Japan to build auto factories
  • FBCCI to host Bangladesh Business Summit 2023 from 11 to 13 March

FBCCI for import duty cut to fit in post-LDC trade regime

FBCCI will send its recommendations to the Prime Minister’s Office within this month

Reyad Hossain & Abul Kashem
10 November, 2021, 03:00 pm
Last modified: 10 November, 2021, 04:15 pm
FBCCI for import duty cut to fit in post-LDC trade regime

The Federation of Bangladesh Chambers of Commerce and Industries has recommended gradually trimming tariff rates in keeping with WTO policies to fit Bangladesh to face possible challenges successfully after its graduation to a developing nation.

The apex trade body in its draft proposal suggests 1%-3% import duties on basic raw materials and daily essentials, 1% on capital machinery and spare parts, and 7%-10% on intermediate inputs.

The FBCCI, a part of a subcommittee on internal resource mobilisation and tariff rationalisation, will send its recommendations to the Prime Minister's Office (PMO) within this month.

The PMO formed the subcommittee to suggest ways to deal with post-LDC challenges.

The commerce ministry is also working on tariff rationalisation with the help of the National Board of Revenue and the Bangladesh Trade and Tariff Commission.

At present, businesses need to pay up to 25% in duty on imports of raw materials and commodities. Besides, the import duty on capital machinery is 1%, but in some cases, importers have to spend extra owing to the HS code-related complexities.

The average tariff rate in Bangladesh is more than 13.5%, while the rate is 11% in low-income countries and 7.2% in lower-middle income countries 7.2%, according to World Bank Tariff Table 2021.

The FBCCI also suggested keeping reduced VAT rates at up to 6% and cancelling advance tax and it also wants adjustment to tax and VAT deduction at source to stop double taxation.

Bangladesh will have to reduce many of the benefits offered to local industrialists in line with World Trade Organisation (WTO) rules once it becomes a developing country in 2026.

Currently, as a least developed country, Bangladesh can set a minimum import price on products for fixing duties. But after 2026, the country will lose the authority, which might result in the government's revenue losses and substantially hurt local entrepreneurs.

The FBCCI also recommended keeping the effective rate of protection for local import-substituting industries within 30%, which is more than 100% in some cases, and maintaining the existing rates of tariffs and para-tariffs on imports of finished products.

The FBCCI is also making a number of short, medium and long-term recommendations for tariff rationalisation. Apart from bringing down the tariff rates to a reasonable level, the organisation will also point out some ways to increase revenue.

It also proposes that the NBR separate its policymaking department and the implementing department.

On condition of anonymity, a FBCCI official engaged in preparing the proposals, told The Business Standard, "Bangladesh will be obliged to adjust its existing tariff rates after being a developing country. The recommendations have been made to protect local industries and to benefit export-oriented factories."

The FBCCI has cited several inconsistencies in income tax and recommended fixing those.

"Income tax ordinance states that accounts are to be maintained according to the International Financial Reporting Standard (IFRS). On the other hand, tax is imposed on 0.5% and 0.25 % of turnover ignoring the accounts. This is against the international standard and sends a mixed signal to taxpayers and investors. Where accounts are maintained according to the IFRS, tax should be imposed on a business only on net profit," according to the draft proposal.

Md Jashim Uddin, president of the FBCCI, told TBS, "The draft proposal has been prepared in consultation with the FBCCI members and representatives of the government's departments concerned. If this is implemented, it will be possible to retain the potential of local industries and export trade after LDC graduation. It will be finalised soon and sent to the government's department concerned."

Traders have been complaining for a long time that the tariff rate in Bangladesh is higher than other countries.

Economists have also at various times suggested rationalising tariff rates, but little progress has been made.

Dr Zaidi Sattar, chairman of Policy Research Institute, said, "It has become imperative to rationalise and modernise the tariff structure, not only because we need to be fully WTO-compliant by the time of LDC graduation in 2026. The FBCCI suggestions to rationalise all taxes and tariffs is a timely proposition."

"The crux of the problem lies in tariffs on consumer goods. Currently, average input tariff is at 13.5%, while average output tariff on finished consumer goods is 47%. This should be addressed," he said.

However, he disagrees with the FBCCI's recommendation of a 30% effective rate of protection for the benefits of local industries. The final proposal of FBCCI should revisit this issue, he said.

Earlier, in the first meeting of the sub-committee on tariff rationalisation, Zaidi Sattar said that supplementary tariffs should be maintained to discourage automobile and alcoholic beverage products. But, it should be reduced for other products.

He said the differences between input and output tariffs need to be reduced.

The Bangladesh Trade and Tariff Commission has already sent a draft of their recommendations for tariff rationalisation to the authorities concerned. In general, the tariff policy may be formulated in such a way that imports by paying applicable taxes are less than the cost of corruption in the form of under-invoicing and smuggling etc.

Besides, a high tariff is imposed on some products, which are not actually imported into Bangladesh, according to the tariff commission.

On condition of anonymity, a senior official at the commission said, "The average tariff has increased owing to higher tariffs on non-imported goods, which is sending a wrong message to the world market. We have expressed our views on tariff rationalisation considering these issues. Hopefully, the policymakers will consider it."

Top News

FBCCI / Bangladesh Chambers of Commerce and Industries (FBCCI) / post-LDC / Post-LDC Bangladesh / post-LDC challenge / import duty

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • GDP growth drops to 7.1% in FY22, per capita income $2,793
    GDP growth drops to 7.1% in FY22, per capita income $2,793
  • Consumers should pay actual costs to get gas, electricity: PM
    Consumers should pay actual costs to get gas, electricity: PM
  • Dr Debapriya Bhattacharya. Illustration: TBS
    Development won't sustain sans political consensus: Debapriya 

MOST VIEWED

  • The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
    IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms
  • Will reform pledges to IMF work this time?
    Will reform pledges to IMF work this time?
  • Infographic: TBS
    Bangladesh in better position than Sri Lanka, Pakistan to navigate forex crisis: UCB Asset Management
  • Illustration: TBS
    Biz leaders want crisis management, energy security for survival
  • Reconditioned vehicles running out of stock as traders fail to open LCs
    Reconditioned vehicles running out of stock as traders fail to open LCs
  • Despite downturn 3 dozen listed firms plan Tk7,500cr investment
    Despite downturn 3 dozen listed firms plan Tk7,500cr investment

Related News

  • FBCCI, ApexBrasil sign agreement to boost bilateral trade cooperation, investment
  • FBCCI seeks PM's directives on not increasing gas price over 57%
  • FBCCI urges NBR to increase ease of doing business
  • FBCCI invites Japan to build auto factories
  • FBCCI to host Bangladesh Business Summit 2023 from 11 to 13 March

Features

Say it with Colours

Say it with Colours

14h | Mode
Photo: Courtesy

From 'Made in Bangladesh' to 'Designed in Bangladesh'

16h | Panorama
Google must adjust to a world where content is increasingly generated by AI. Photo: Bloomberg

Google will join the AI wars, pitting LaMDA against ChatGPT

13h | Panorama
The megaproject Rooppur Nuclear Power Plant has a debt of Tk90,474 crore. Photo: Courtesy

Projects funded with debt need to be selected prudently, and implemented timely

14h | Panorama

More Videos from TBS

ICB to withdraw Padma Bank Investment as return

ICB to withdraw Padma Bank Investment as return

7h | TBS Insight
Kiara Advani & Sidharth Malhotra's Wedding Update

Kiara Advani & Sidharth Malhotra's Wedding Update

7h | TBS Entertainment
What you probably didn't know about CR7

What you probably didn't know about CR7

4h | TBS SPORTS
US shoots down Chinese spy balloon

US shoots down Chinese spy balloon

5h | TBS World

Most Read

1
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

2
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

3
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

4
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

5
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

6
Photo: Collected
Startups

ShopUp secures $30m debt financing to boost expansion, supply chain

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net