Hotel-owners demand continued duty exemption for material imports

Luxury hotel owners on Monday demanded the continuation of duties exemption for their hotel material imports, saying that withdrawal of such facilities will lead to a fall in foreign tourists in the country. 

They have been enjoying a 10% exemption in import duties for interior decoration materials, kitchen equipment, building security equipment and furniture etc for a long time.

The Bangladesh International Hotel Association, in a letter to the National Board of Revenue, said the budgetary measures to withdraw the duty exemption from the next fiscal year would increase hotel establishment costs as well as room rents and other charges for customers. 

"Since most of the materials used in star hotels are imported from abroad, the room rent and other costs of hotels in Bangladesh are relatively high. In such a situation, if the duty exemption benefits are withdrawn, the cost of customers will increase," reads the letter, a copy of which The Business Standard obtained.

"In that case, foreign tourists will avoid Bangladesh and go to other countries," Hakim Ali, president of the association, wrote in the letter.

Finance Minister AHM Mustafa Kamal, in his budget speech of FY24, proposed to withdraw the existing notification for importing hotel materials at a concessionary rate. "To support the expansion of the hotel industry in Bangladesh, a notification for importing materials at a concessionary rate is in place for a decade. As many large-scale and high-quality hotels have already been built under this facility, it seems unnecessary to continue the duty tax exemption, and therefore, for the sake of revenue protection, I propose to withdraw the existing notification," he said.

Hotel entrepreneurs said such measures will also discourage investors from investing in new hotels. According to the civil aviation and tourism ministry, Bangladesh has 18 five-star and six four-star and 22 three-star hotels.