AIT makes TCB products pricier, says Chairman

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Monira Munni State-run trading corporation has failed to intervene in the local commodity market due to advance income tax, which raises prices up to 10 per cent, officials said. They said Trading Corporation of Bangladesh (TCB) pays 5.0 per cent AIT if the payment exceeds Tk 30 million whenever it buys products from the local market. But private distributors, who buy from the local market, don't require paying the AIT, they added. "The AIT makes our products' prices costlier than those of private suppliers," TCB Chairman Sarwar Jahan Chowdhury told the FE. As a public body, TCB needs to pay the AIT whenever it buys any products from the local market, he said. "We are to supply essential items at a lower rate to the consumers and keep the market stable," he said, adding TCB's purpose is not to do business, but to intervene in the market through supplying essential commodities at lower prices. A dealer employed by private refiners buys sugar at Tk 52 per kg from the mill gate, while TCB has to pay Tk 59 per kg including an additional Tk 3.0 for the AIT and Tk 4.0 as dealer commission, he said. "But how can we supply daily essentials at lower rate with such a provision?" he asked. The TCB chief demanded withdrawal of the AIT in a bid to supply essentials at a lower rate and successful market intervention for price control. "Our products' prices go up 10 per cent for this (AIT)," a senior official of TCB said adding if the agency could buy products from the local market without paying the AIT, it could make a positive impact on the market and sell items at lower rate compared to the existing rate. TCB buys oil at Tk 109 per litre from the mill gate while the private distributors buy at Tk 104 per litre, he said, adding the retailers buy oil from the private distributors at Tk 106 per litre and sell at Tk 109 per litre. But the same product's price goes up at Tk 113-114 per litre when it reaches TCB dealers, he said. He also said the government should allow TCB for transaction with other private banks with similar interest rate in a bid to reduce dependency and pressure from the state-owned bank. "It will also help us accelerate the handling of products within the shortest possible time," he said.