July-Oct import revenue earning raises concern

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Doulot Akter Mala
The revenue earning from imports has gone down in recent months, raising concerns among officials of the National Board of Revenue (NBR).
The decline in import revenue is attributed to the continuous fall in prices of commodities, including fuel oils and Mild Steel (MS) rod, in the international market and the 'go-slow' policy of the local importers.
According to sources, the revenue earned by the NBR from imports during the first four months of the current fiscal stood at around Tk. 67.11 billion.
The amount though 22 per cent higher than the revenue earned during the corresponding period of the last fiscal (2007-08) is not in commensurate with the target set in the national budget for the current fiscal. The import revenue target has been set at Tk. 225.36 billion in the national budget for the current fiscal.
The customs department, that earns import revenue from customs duty, VAT and supplementary duty at import stage, collected Tk 14.80 billion revenue in October last compared to Tk 17.49 billion in the previous month. The earning was Tk. 15.09 billion in August and Tk. 19.67 billion in July last.
Customs officials said decline in the prices of major commodities in the global market has been responsible for a sharp decline of customs department's earning. The caretaker government set an ambitious revenue-earning target of Tk 545 billion for 2008-09.
Of the total target, it has projected 41 per cent revenue income from the customs department that might prove very difficult to achieve for the next elected government, officials said.
The government had set a higher revenue collection in the backdrop of uptrend in commodity prices in the international market in June last. But the situation has dramatically changed in recent months following the global financial meltdown, said a senior customs official.
The government had set tariff structure on the basis of product prices, he said adding that the declining prices of MS rod and fuel oils will mostly affect the revenue earning of the customs department, he said.
The NBR will adopt a wait-and-see policy and observe the situation. Any change in tariff structure to compensate for the revenue loss would directly affect the local market and businesses, they maintained.
Falling trend in the opening of fresh letters of credit (LCs) against imports does also indicate that the businesses are maintaining a 'go-slow strategy' to avoid any financial losses in near future.
The fall in international commodity prices pushed down the opening of fresh LCs by 43 per cent in October compared to that of the previous month.
In October, import LCs worth US$1.341 billion were opened compared to that of $2.357 billion in the previous month.