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Govt cuts AIT on imported LNG

Doulot Akter Mala | May 20, 2018 00:00:00

The revenue board cut advance income tax on the import of liquefied natural gas (LNG) in order to keep its prices low on the local market.

The National Board of Revenue (NBR) slashed the advance tax to 2.0 per cent from the existing 5.0 per cent in case of LNG import.

The board has issued a notification, signed by income tax policy member Kanon Kumar Roy, to make it effective.

A senior official of the income tax wing said such tax on import of LNG has been reduced to facilitate the supply of energy at lower prices after re-gasification.

According to the income tax ordinance, most of the imported items attract advance tax at a rate of 5.0 per cent. The rate of Advance Income Tax (AIT) is also 2.0 per cent for the imports of octane and petrol.

The government is importing LNG to meet the growing demand for gas, mainly in the power plants.

The country's first LNG shipment arrived in the country in April from Qatar. The imported LNG would be gasified again and pumped into the national gas grid at 500 million cubic feet per day (mmcfd).

The government has to purchase the LNG at higher prices than locally-produced gas.

Earlier, the finance minister AMA Muhith had hinted at lifting the prices of gas after import of LNG.

The average cost of per unit of gas is Tk 7.34, but it will be almost double to Tk 13 per unit after the imported LNG arrives, according to an estimate of Petrobangla.

Prices of LNG are said to be much higher on the international market than that of the compressed natural gas (CNG) in the country.

Revenue board officials said the agency received an instruction of the finance minister recently on reviewing the import cost of LNG.

In the instruction, the finance minister sought a detail of the actual cost of importing the LNG.

"We would review the import prices of LNG to make an upward adjustment of its price," the finance minister said in a note to the board.

In the note, he also sought revenue board's recommendations on how the government can hike tariff of power.

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