Bangladesh Govt to waive Tk 3b taxes on refined sugar import
The government may waive import taxes on refined sugar to lower local prices. While officials say this could reduce costs by Tk 2 per kg, industry leaders warn it threatens local manufacturers. Bangladesh Sugar and Food Industries Corporation supports the move, but refineries argue it disrupts market balance. The National Board of Revenue is currently reviewing the proposal.
The government has planned to waive taxes on import of refined sugar in a bid to stabilise its price in local market.
Tax exemption plea of the Ministry of Industries is under active consideration of the National Board of Revenue (NBR), revenue officials said.
Currently, import of refined sugar is subject to payment of Tk 2,000 duty per tonne, while raw sugar enjoys duty-free import facility. Prices of lose sugar is Tk 50-55 per kg, while it is Tk 57-60 for packed ones.
“We have received a request from Bangladesh Sugar and Food Industries Corporation (BSFIC) for waiver of the import tax on refined sugar. It is under review now,” said a senior customs official.
He said although the government waived import taxes on raw sugar, it brings little benefit to the consumers. Prices of sugar, including other major food items, remained volatile in the market despite waiver of all import taxes.
Revenue officials said the government will lose Tk 3.0 billion for waiver of the import duty on sugar.
A B M Khorshed Alam, additional secretary of industries ministry, said: “Waiver on refined sugar import taxes will make it cheaper in the local market. It will also help reduce sugar prices creating competitiveness.”
Price of refined sugar will reduce by at least Tk 2.0 per kg for waiver of duty, he said.
“Difference of prices between raw and refined sugar in the international market is US$100 per tonne,” he said, adding that the government wants to make the food item more available in the market to check price manipulation.
BSFIC under the industries ministry has imported 25,000 tonnes of sugar and another 25,000 tonnes is in pipeline. Besides, it manages 14 sugar mills with the total production capacity of 125,000 tonnes.
“We have urged the finance minister and the cabinet to consider tax waiver for refined sugar,” he added.
However, S M Mohiuddin Monem, deputy managing director of Abdul Monem Ltd, strongly opposed the move, saying “It is not a pragmatic approach. There must be a price-gap between raw and refined sugar for survival of local industries.”
The government will have to decide whether it will facilitate traders or manufacturers, he said. On price hike of sugar, he said it is completely dependent on international prices.
“Sugar price is US$ 800 per tonne or Tk 56 per kg now, while local traders are selling it lower than their import prices,” he said.
The country’s seven sugar refineries have the total production capacity of 2.4 million tonnes against the annual local demand for 1.4 million tonnes. If the government initiates such step, the county’s industralisation will be threatened, he added.
Earlier, in the current budget, the government imposed Tk 2,000 specific duty for raw sugar and Tk 4,000 for refined sugar, but it was forced to waive duty on raw sugar to stabilise prices in Ramadan. Duty on refined sugar import was also reduced to Tk 2,000.
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Source : The Financial Express
