Bangladesh : Govt makes major moves to cut prices of edible oil, sugar, egg
In response to rising food prices, Bangladesh’s National Board of Revenue (NBR) reduced import duties and VAT on eggs, edible oil, and refined sugar. Duties on eggs were cut from 25% to 5%, reducing import costs, while VAT on soybean and palm oil imports dropped from 15% to 10%, with further exemptions on production and trade. The specific duty on refined sugar imports was also reduced by 25%. These measures aim to lower domestic prices and increase supply amid ongoing food inflation.
In the face of public outcry over the high prices of essential food items, the National Board of Revenue (NBR) yesterday slashed customs taxes on imports of eggs, edible oil and refined sugar.
The move is designed to encourage businesses to purchase the items from the international market and bring down prices in the domestic market.
Import duties for eggs saw the highest cut, being reduced by 20 percentage points to 5 percent, as prices of the cheapest protein source hit as much as Tk 200 per dozen in shops in the capital.
Similarly, the specific import duty for refined sugar was reduced alongside the value-added tax (VAT) on the import, processing and trade of soybean and palm oil.
The duty and VAT have been reduced for eggs, edible oil and sugar with the objective of keeping prices within the purchasing capacity of the masses by increasing supply, the NBR said in a statement.
Inflation in Bangladesh has been hovering above 9 percent since March of 2023 while food inflation has remained above 10 percent since April this year.
In another development yesterday, a senior commerce ministry official said they were considering allowing the import of nearly five crore eggs to boost supply in the domestic market and contain prices.
Last week, the commerce ministry allowed seven firms to import 4.5 crore eggs.
The NBR said the cost of importing eggs would decline by Tk 13.8 per dozen and become affordable for commoners following the duty reduction.
The reduced import tax for eggs will be valid until December 31 this year.
VAT relaxed for edible oil
In the case of edible oil, the NBR slashed the VAT on imports of soybean and palm oil to 10 percent from 15 percent. It also fully exempted VAT at the production and trading stages of the highly import-based commodity.
The reduced VAT privilege will remain effective until December 15 this year, the NBR said.
The rate cut followed a Bangladesh Trade and Tariff Commission (BTTC) recommendation to reduce indirect taxes in order to contain prices of edible oil, especially as 90 percent of Bangladesh’s demand for it is met through imports.
Prices of soybean and palm oil soared in the international market over the past several months, according to a BTTC report. As such, local consumers also saw higher prices.
Prices of unpackaged soybean oil increased by 2.67 percent to as much as Tk 156 per litre in Dhaka. Prices of bottled soybean oil edged up too.
Meanwhile, prices of unpackaged palm oil rose roughly 10 percent to about Tk 146 per litre, according to market data compiled by the Trading Corporation of Bangladesh (TCB).
Specific duty on sugar reduced by 25%
The NBR reduced the specific duty for imports of refined sugar by 25 percent to Tk 4,500 per tonne from Tk 6,000 per tonne in a bid to cut prices of the sweetener.
The reduced duty took effect immediately.
The fresh cut for refined sugar imports came a week after the regulatory duty on sugar imports was slashed from 30 percent to 15 percent.
At the time, the NBR said the reduced regulatory duty for raw and refined sugar would reduce the import cost of raw sugar by Tk 11.18 per kilogramme (kg), and the cost of refined sugar by Tk 14.26 per kg.
However, retail sugar prices in Dhaka did not decline. Rather, they rose nearly one percent to Tk 127-Tk 135 per kg over the past week.
Yesterday, prices of sugar, 99 percent of the demand for which is met through imports, were 2.75 percent higher than a month ago, according to TCB data.
Source Link : https://www.thedailystar.net/business/news/govt-makes-major-moves-cut-prices-edible-oil-sugar-egg-3730351
