Bangladesh : NBR imposes 1% advance tax on edible oil imports
Bangladesh’s NBR has imposed a 1% advance income tax on edible oil imports, effective September 11, covering crude and refined oils. Authorities say it targets tax evasion at the sales stage, with import-stage payments adjustable later, so prices need not rise. Importers warn it could still increase consumer costs.
The National Board of Revenue (NBR) has imposed a 1% advance income tax on the import of edible oil, both crude and refined, according to a statutory regulatory order (SRO) issued yesterday (15 September).
The order states that the measure has been effective since 11 September and applies to both crude and refined soybean oil as well as other edible oils.
Importers fear the new tax will push up consumer prices, while NBR officials argue there is no reason for any oil price increase as the tax can later be adjusted.
According to NBR officials, the decision was taken primarily to prevent tax evasion at the sales or turnover stage by collecting it in advance at the import stage.
Dabirul Islam Didar, general manager of Bangladesh Edible Oil Limited, told The Business Standard, “If a 1% advance income tax (AIT) is imposed at the import stage, it will increase the cost of the product, which may in turn raise consumer prices.”
However, a senior official from the NBR’s Tax Policy Department, requesting anonymity, told TBS, “Currently, edible oil companies pay 1% tax on turnover. If the tax is collected at the import stage, companies will have the option to adjust it later. So, there is no reason for prices to rise.”
“Suppose the import value is Tk95. Tk0.95 will be collected as AIT. If the product is later sold at Tk100, then 1% tax, or Tk1, will apply. From this, the Tk0.95 paid at import can be adjusted. In other words, companies will still pay the same as before. Therefore, there is no reason for prices to increase,” the official explained.
When asked why the new tax was necessary if government revenue remains unchanged, the official said, “There are allegations that some companies are not paying turnover tax properly, causing revenue loss. By collecting the tax at the import stage, the scope for evasion will be reduced.”
Dabirul Islam Didar, however, rejected this explanation. “Taxes always hit prices,” he noted.
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Source : The Business Standard
