NBR to align import duties for 20 products with WTO standards in FY25
This move will result in lower import duties for most of these products, streamlining both taxation and trade
The National Board of Revenue (NBR) intends to align customs duties for 20 products with the World Trade Organisation's (WTO) Bound Duty rates in the upcoming fiscal year – a move that is expected to lower import duties for most of these products and improve taxation and trade efficiency.
According to NBR officials, the plan also involves aligning another 40 products under WTO Bound Duty over the next two fiscal years in phases.
This initiative is crucial to address potential challenges stemming from Bangladesh's graduation from Least Developed Country (LDC) status, Finance Division sources told TBS.
A 22-member committee, led by the prime minister's principal secretary, was formed to address potential challenges of LDC graduation. The committee has set up sub-committees on specific sectors to ensure a smooth transition.
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Sources said the sub-committee on internal resource mobilisation and tariff rationalisation held a meeting about this duty alignment plan in the last week of May.
At the meeting, presided over by Finance Secretary Md Khairuzzaman Mozumder, NBR Member (Customs) Md Masud Sadiq presented the plan's details.
Masud Sadiq said six products were brought under WTO Bound Duty in the 2022-23 fiscal year budget. Sixty more products have been identified for duty alignment with the WTO.
The plan aims to achieve this alignment for all 60 products by 2026, implementing it in three phases: 20 products in 2024, 20 in 2025, and 20 in 2026.
According to NBR sources, the 60 products planned to be brought under WTO Bound Duty include cold-water shrimp and prawns, milk and cream powder, almonds, hazelnuts, fresh grapes, apples, pears, quinces, plums, sloes, green tea, black tea, cinnamon, pastries, cakes, various wines, spirits, rum and tafia, vodka, cigarettes, tobacco, household articles, loaded printed circuit boards, and similar products made from these ingredients.
Initially, priority will be given to products whose import duties, when aligned with WTO Bound Duty, will not significantly impact revenue collection.
Masud Sadiq also mentioned during the meeting that setting a minimum value for certain imported products contradicts the WTO Agreement on Customs Valuation. Therefore, steps are being taken to gradually eliminate this practice.
Furthermore, plans are in place to gradually reduce Supplementary Duty (SD) and Regulatory Duty (RD) on imported goods to comply with the WTO Agreement on Customs Valuation, he said.
As part of the plans, careful consideration will be given to ensuring that revenue collection is not adversely affected and that local industries continue to be protected, Masud added.
WTO compliance to facilitate trade
Md Hafizur Rahman, former director general of the WTO Cell at the Ministry of Commerce, told TBS that this decision will have a positive impact on the post-LDC transition phase for Bangladesh.
He explained that bound duty encompasses both customs duty and regulatory duty. This adjustment will also facilitate Free Trade Agreements (FTAs), as demonstrated by the elimination of regulatory duties during the signing of a Preferential Trade Agreement (PTA) with Bhutan. Therefore, it represents a positive step for the future.
