The government has halved the regularity duty (RD) on sugar imports to 15 per cent from existing 30 per cent, aiming to keep prices of the sweetener stable in the domestic market.
As a result, the total impact import duty on raw and refined sugar will be reduced by Tk 11.18 per kg and Tk 14.26 per kg respectively.
The National Board of Revenue (NBR) issued a statement in this regard on Wednesday, saying that the currency devaluation, recent students' movement and flood situation have created a risk of price hikes of essential commodities, including baby food, beyond the purchasing power of the common people.
Under this circumstance, the NBR has taken initiatives to keep sugar prices affordable and stable through the duty cut. The sugar prices are expected to come down commensurate with the duty reduction, it said.
Apart from this, the NBR added, the duty reduction will discourage smuggling of sugar through illegal channels and increase the import of sugar through official channels, thus the NBR is expected to increase duty collection.
The revenue authority reduced the RD at the request of the Bangladesh Trade and Tariff Commission (BTTC) made on October 6.
The state entity suggested halving such duty on sugar imports, aiming to keep the sweetener prices stable in the market during the upcoming fasting month of Ramadan.
It also suggested intensifying surveillance by law-enforcers concerned to curb cross-border smuggling of sugar.
The BTTC expected that the prices of sugar will remain stable in the market if the RD is reduced to 15 per cent from the existing 30 per cent, while smuggling will reduce and formal imports will be encouraged.
According to the BTTC letter, generally during the holy month of Ramadan, the demand for sugar rises. So, the sugar refiners should now open import letters of credit (LC) to stabilize the overall supply chain.
Besides, the price of raw sugar in the global market increased by 20.81 per cent in the last one month.
At present, some 15 per cent VAT is applicable on import of raw sugar while the import duty (customs duty) is Tk 3,000 per tonne.
The government imposes 2.0 per cent and 5.0 per cent advance income tax (AIT) and Advance Tax (AT) respectively. However, there is no VAT at the production stage of raw sugar.
The sugar refiners say a cut in the RD would reduce the retail prices of sugar.
The annual sugar demand is 2.0-2.2 million tonnes. To meet this demand, around 2.2-2.4 million tonnes of raw sugar are imported annually. Besides, around 50,000 tonnes of refined sugar are imported each year, according to the BTTC.
Currently, over 98 per cent of domestic sugar demand is met by private sugar mills, while state-owned mills contribute only 1.0-2.0 per cent.
There are five private sugar refineries in the country with their daily production capacity of about 10,200 tonnes.
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