Underlining that the current customs tariff structure in Bangladesh is ‘inefficient’ and ‘unfriendly’ to business as there are overlapping the import duty rates and faulty categorisation of raw materials, intermediate and finished goods in the structure, a recent report of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) suggested several remedial measures to overcome the shortcomings.
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The FBCCI report highlighted that in the existing structure, many basic raw materials fall under high duty rates whereas many finished consumer goods fall under low duty rates, which it states is against the principle of tariff system of Bangladesh.
As such FBCCI – which carried out a study on ‘Rationalisation of Customs Tariff Structure’, based on which it prepared the report – suggested a number of steps, including regrouping the existing categories of imported goods and restructuring of duty rates to make the tariff system efficient, business-friendly and pragmatic. The findings of the study have already been submitted to the Finance Minister of Bangladesh Abul Maal Abdul Muhith and the National Board of Revenue (NBR) for consideration in the budget for the fiscal year of 2016-17.
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“In sum, this study provides a blend of proposals to strike a balance between the conflicting interests of revenue earnings maximisation, growth of domestic industry, and promotion of investment through simplification of tariff regime,” the report maintained, according to which NBR would be able to earn additional net revenue BDT 1,374.96 crore if it accepts the proposals of rationalisation of the duty structure.
In its estimation, the net loss of the NBR would stand at BDT 1,213.04 crore if it accepts the FBCCI-proposed customs tariff structure while it would earn additional BDT 2,588 crore if the regulatory duty is increased as suggested by the trade body.
