It was a startling revelation, and disquieting too. The loss incurred by the government in terms of revenue due to the misuse of bonded warehousing system has been stated to be far beyond commoners' perception-astronomical, to say the least. The statement came from none other than the chairman of the National Board of Revenue (NBR) at a seminar organised by the Dhaka Chamber of Commerce and Industry (DCCI) in Dhaka the other day.
Although the seminar mainly focused on the costs of doing business in the country, the NBR chairman was apparently more concerned about the loss the government incurs-that too through misuse of vital facilities provided to the business community. What he said in this connection should cause many in the government to sit up. The government, he said, can build two Padma bridges with the customs duty lost by the NBR annually from the misuse of bonded warehousing. One may find it a bit difficult to match his statement with the Padma bridge budget. The revised estimated cost of the Padma Bridge project is at around Tk 280 billion. Did he have the figure right while equating the annual NBR losses with the construction cost of two Padma bridges?
This is not to question his arithmetic, but, given the unbelievably high figure, it may be seen as a bewildered-in fact panicky-reaction of a commoner. That the NBR chief was not indulging in a wild guess was made clear when he said that his agency was ready to give the government the money if misuse of bonded warehousing could be stopped. No doubt, a blatant statement that none of his predecessors ever attempted to make! What one may draw from his statement is that the practice is on, maybe for long, but what he did not mention is the reason why his agency is not up for curbing it.
Bonded warehousing is a service that allows exporters to import and store their raw materials without payment of customs duties for a certain period of time until these are used in the manufacture of products exported. Bonded warehousing in Bangladesh was instrumental in bringing much of the vigour and dynamism that the country's export sector needed badly. Since the mid-eighties when garment export began to indicate signs of promise, bonded warehousing was one of the key mechanisms, along with back-to-back letter of credit, that succeeded in materialising much of what the business community was up for. However, there were talks of misuse of the system by errant exporters. But the mechanism-backed by maintenance of passbooks by customs officials of imported goods stocked in the bonded warehouses and exported subsequently-was meant to guard against any kind of misdeeds. The common perception is that it is a full-proof system, and with its continuation over the decades it should act as a deterrent -one that is good enough to stop and detect any malpractice.
Since the NBR chief has alleged that goods imported without paying duties under the bond system actually land up in the wholesale markets, one has reasons to ask the simplest of questions: why is it so? Isn't it the responsibility of the customs to ensure that such practices do not occur? And in the event of an occurrence, the provision of penal measures in terms of hefty fine should take care of the losses caused to the government. Is the system not working now, or, is there a lacuna that allows deceitful practices of selling bonded goods in the wholesale markets?
If imported goods-mainly fabrics - find their way to the wholesale markets without payment of duties, loss of government revenue is sure to be sky-rocketing. It is inevitable to be so. But the big question that can not be averted is the manner in which it is practised. For, it is the customs officials who are the custodians of bonded warehouses. The NBR should look into the manner first before complaining of the dishonest ways of the unscrupulous business people.
Availability of plentiful imported fabrics in the wholesale markets of the country is well known. But to question that these are all pilfered, meant for bonded warehouses, is to question the very foundation on which the bond mechanism is based.
Now that the issue got raised so pointedly, it is only likely that it would receive due attention from relevant quarters of the government, and not be allowed to get muted as most wrong doings in this country are so deftly done.
wasiahmed.bd@hotmail.com
