The National Board of Revenue (NBR) has exempted tax and VAT on all types of edible oils, including sunflower, canola, soybean, and palm oil.
This move is aimed at ensuring an adequate supply in the market and making retail prices more affordable for consumers, who are currently facing higher costs due to shortages of these essential kitchen items.
In a circular issued on Monday, the NBR announced that import duties, regulatory duties, and advance income tax (AIT) on both refined and non-refined edible oils will be exempted until March 2025.
Additionally, the Value Added Tax (VAT) paid by final consumers will also be waived during the same period.
The NBR issued three separate circulars outlining these changes.
The VAT on imports of edible oils has also been reduced to 5.0 per cent from the existing 15 per cent. As a result of this revision, importers will only need to pay 5 per cent VAT on edible oils, with no additional taxes.
According to the NBR, these measures are expected to lower the price of edible oil by Tk 40 to Tk 50 per litre, thanks to the tax withdrawal and VAT reduction.
The decision follows recommendations made by the Bangladesh Trade and Tariff Commission (BTTC) two weeks ago, urging the government to reduce import taxes on sunflower and canola (or rapeseed) oil to increase the variety of cooking oils available in the market.
Local consumers, who have been grappling with persistent inflation, have experienced significant price increases for cooking oil over the past three months.
Bangladesh relies heavily on imports to meet its domestic demand of approximately 2.3 million tonnes of edible oil annually.
As of Sunday, the average price of unpackaged palm oil was Tk 156.5 per litre, marking a 23 per cent year-on-year increase, according to data from the Trading Corporation of Bangladesh.
Prices for soybean oil have also risen, and packaged soybean oil has become scarce in many areas of the city due to supply shortages.
Before the removal of import tariffs, crude sunflower oil importers were required to pay a total of 31 per cent in duties and taxes, while refined sunflower oil importers faced a 32 per cent duty.
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