The government is likely to lower the duty and taxes on liquor import to contain the dominance of grey market in its business, officials said.
Presently, a total of 425 per cent duty and taxes is applicable in case of liquor import and 310 per cent for beer import.
At consumer level, the duty and taxes reach 590 per cent for liquor and 447 per cent for beer. It pushes alcohol prices to mountain high, forcing the private sector bar/club owners to collect the items from illegal sources.
A senior official of the National Board of Revenue (NBR) in a recent meeting informed that the duty cut was under consideration of the revenue authority.
The meeting decided that the Bangladesh Parjatan Corporation (BPC) is facing immense competition from the grey market in liquor business. So, it would soon write to the NBR, requesting reduction of the duty and taxes on import.
Civil Aviation and Tourism Secretary Mokammel Hossain presided over the meeting to takes steps for materialising a recommendation of the Parliamentary Standing Committee on the Ministry of Civil Aviation and Tourism.
The parliamentary committee asked the ministry to sit with the Finance Division and the NBR to lower the tax on liquor import, keeping in mind the role of tourism sector in the country's economic growth.
The BPC officials said since the tax rate on formal liquor import is very high, the bar owners prefer to source the items from illegal sources. So, the government incurs revenue loss.
In the meeting the BPC officials said the taxation system - applied in case of liquor import - is faulty. Thus, its import price also goes up significantly.
When the BPC imports alcohol in a bulk quantity from global market or main producers, it gets the products at cheap rates.
However, the revenue officials do not take into consideration the prices mentioned in the letters of credit (LCs). Rather, they find out prices through internet by a market monitoring committee, which ultimately determines retail prices.
As a result, the BPC is forced to pay additional taxes than the real import prices, they added.
The NBR official - present in the meeting - said since the BPC is a public sector entity that collects alcohol from the producers, the invoice prices can be taken into consideration while calculating taxes.
In the fiscal year 2021-22, the BPC imported alcohol and cigarette worth US$0.7 million, down from $1.1 million in the previous year.
The Covid-19 pandemic created disruption in the movements of foreigners and goods during the last couple of years, which lowered the import, said another official.
syful-islam@outlook.com
