Govt mulls slashing regulatory duty on sugar imports to stabililse market
Currently, importers have to pay a specific tax of Tk3,000 per ton of sugar, in addition to 15% VAT, 30% regulatory duty, and 2% advance income tax
The government is considering reducing the regulatory duty on sugar imports from 30% to 20% to stabilise the market.
Sources from the National Board of Revenue (NBR) said that several proposals have been sent to the higher authority to stabilise the market, including reducing regulatory duties. A decision will be made based on the proposals.
An NBR official told The Business Standard on condition of anonymity that the announcement could come this week if the proposals are approved.
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Consumers are seeing this initiative of the NBR as positive. Consumers Association of Bangladesh (CAB) vice president SM Nazer Hossain told TBS, "Strong monitoring by the authorities concerned is necessary to ensure that consumers benefit from the tariff reduction. Otherwise, the benefit will ultimately not go to the consumer."
He alleged that although the price of sugar in the global market has been declining in recent months, this benefit has not been passed on to consumers in Bangladesh. Instead, the benefits have gone into the pockets of companies.
In May, the price of sugar in Bangladesh was increased by Tk16 to Tk125 per kg. However, there are allegations that it is being sold at even higher prices in the market.
According to the Trading Corporation of Bangladesh (TCB), sugar was selling at Tk135 per kg on Saturday.
Currently, importers have to pay a specific tax of Tk3,000 per ton of sugar, in addition to 15% VAT, 30% regulatory duty, and 2% advance income tax.
Until May 15 of this year, the regulatory duty on sugar imports was reduced to 20%, but this was not extended.
According to importers, the total tax incidence per kilogram of sugar by the time it reaches the consumer is around 65%, or Tk42.
Biswajit Saha, general manager of City Group, one of the largest sugar refiners in the country, said that a month ago, the price of sugar per ton in the global market was $620, but it has now increased to $670.
Currently, five companies – City Group, Meghna Sugar Refiners, S Alam Refined Sugar Industries, Abdul Monem Sugar, and Deshbandhu Sugar Mills – are refining and marketing sugar in Bangladesh. Their annual production capacity is 39 lakh tonnes, according to the commerce ministry.
The demand for sugar in the market is 20-22 lakh tonnes per year, of which 97% is imported and 3% is locally produced. Additionally, 5% of sugar is sold in packets and the rest in bulk form.
