The government is set to offer a single-tier Value Added Tax (VAT), instead of existing three tiers, on import of crude edible soyabean, palm and palmolin oil in a bid to ease process of release of the essential consumer item.
The National Board of Revenue (NBR) recently got directive of Finance Minister AMA Muhith to make the VAT collection procedure one-tier to collect the entire amount at import stage.
 The NBR will issue a Statutory Regulatory Order (SRO) shortly by offering the single-tier VAT payment facility to the importers of edible oil until June 30, 2016.
A senior tax official said the government will not lose any taxes after making the VAT payment procedure single-tier.
"Importers have long been requesting the government to make the VAT payment process one-tier. There are also suggestions from the Commerce Ministry and the Tariff Commission in this regard," he said.
Importers will be able to pay 15 per cent VAT in one stage at import point until fiscal year 2016. They are paying it in three stages currently, he added.
Currently, edible oil importers are paying 10 per cent VAT at import stage, VAT on pre-fixed tariff values at production stage and 4.0 per cent VAT at business stage.
The NBR has fixed the tariff value at Tk 4,110 per tonnes for refined soybean oil, Tk 3,700 for refined palm oil and Tk 6,667 for rapeseed, canola and colja oil. Importers will have to pay 15 per cent VAT on the tariff value at production and supply stage.
A total of 14.88 per cent VAT is currently imposed on edible oil import that may vary with price fluctuation of the commodity in the international market.
Commerce Minister Tofail Ahmed in a meeting on November 16 last agreed with the demand of edible oil importers for one-tier VAT.
President of the Bangladesh Edible Oil Wholesale Merchants Association Haji Mohammad Golam Maula said the single-tier VAT would ensure a level-playing field for the edible oil traders.
"Many factories evade VAT at different stages causing problem for genuine VAT payers as they cannot maintain price competitiveness," he said.
The edible oil companies preferred payment of all VAT at port or landing point, he said.
VAT officials said the process might create distortion in supply chain causing problems in monitoring at production and supply stage of the essential item.
To avoid the problem, the Finance Minister has given instruction to incorporate a provision of 'book-keeping' in the SRO for the edible oil importers to ensure record keeping of production and supply of the oil. Importers will have to submit the documents with the VAT return.
The country's annual demand for edible oil is around 1.8 million tonnes. Bangladesh imports edible oil from different countries including Brazil, Malaysia, Indonesia, Argentina, Thailand and Germany.
doulot_akter@yahoo.com
Single-tier VAT for edible oil import on the cards
Doulot Akter Mala | Published: December 26, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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