20pc regulatory duty imposed on tea import
Monday, 9 January 2012
FE Report
The National Board of Revenue (NBR) has imposed 20 per cent regulatory duty (RD) on the import of tea following demands of a section of local tea growers.
The NBR issued a Statutory Regulatory Order (SRO) Sunday imposing the RD. The customs wing of the board made the order effective from last week.
Customs officials said there is already 5.0 per cent RD on import of tea. The NBR imposed the 20 per cent RD in addition to the existing 5.0 per cent RD.
Referring to local tea association leaders, a customs official said the auction rate of tea is decreasing gradually due to a substantial increase of imported tea from different countries.
The country cannot meet the local demand by quality tea production.
Local tea growers expressed their mixed reaction to the imposition of heavy duty on tea.
A section of tea growers demanded withdrawal of all import duty while other producers hailed the decision.
Some local tea growers said insufficient production of good quality tea is the main reason for the import of quality tea from other countries.
Almost 20 to 25 per cent of the tea produced every year is of bad quality while the price of good quality tea is too high, said a local tea grower.
The country will have to ensure good quality of tea to check import, he said.
Importers have found it profitable to import quality tea even paying 60 or 80 per cent duty, he said.
He underscored the need for adequate financing in the sector to produce quality tea and export the same after meeting the local consumption demand.
According to the revenue board statistics, tax incidence on import of tea is 59 per cent.
The country's annual consumption for tea is 53 million kilogram (kg) while the production is 60 million kg.
This year, the import of tea increased significantly as the tariff structure is still favourable for the importers.
In 2011, around 6.0 million kg was imported from other countries hitting the local tea growers.
The National Board of Revenue (NBR) has imposed 20 per cent regulatory duty (RD) on the import of tea following demands of a section of local tea growers.
The NBR issued a Statutory Regulatory Order (SRO) Sunday imposing the RD. The customs wing of the board made the order effective from last week.
Customs officials said there is already 5.0 per cent RD on import of tea. The NBR imposed the 20 per cent RD in addition to the existing 5.0 per cent RD.
Referring to local tea association leaders, a customs official said the auction rate of tea is decreasing gradually due to a substantial increase of imported tea from different countries.
The country cannot meet the local demand by quality tea production.
Local tea growers expressed their mixed reaction to the imposition of heavy duty on tea.
A section of tea growers demanded withdrawal of all import duty while other producers hailed the decision.
Some local tea growers said insufficient production of good quality tea is the main reason for the import of quality tea from other countries.
Almost 20 to 25 per cent of the tea produced every year is of bad quality while the price of good quality tea is too high, said a local tea grower.
The country will have to ensure good quality of tea to check import, he said.
Importers have found it profitable to import quality tea even paying 60 or 80 per cent duty, he said.
He underscored the need for adequate financing in the sector to produce quality tea and export the same after meeting the local consumption demand.
According to the revenue board statistics, tax incidence on import of tea is 59 per cent.
The country's annual consumption for tea is 53 million kilogram (kg) while the production is 60 million kg.
This year, the import of tea increased significantly as the tariff structure is still favourable for the importers.
In 2011, around 6.0 million kg was imported from other countries hitting the local tea growers.