BB prefers tax-free US$ import
Wednesday, 1 December 2010
FE Report
Bangladesh Bank (BB) has preferred tax-free import of US dollar to keep balance on prices of currencies in cash and currencies imported through banking channel.
The central bank has said the prices of US dollar will be volatile, if the government charges duty taxes on face value of imported dollars.
Earlier, the BB allowed the Standard Chartered Bank (SCB) to import foreign currencies worth $10 million to meet the demands of the local market.
The SCB has found that it will have to pay 26.5 per cent of the foreign currency as tax to import the currencies. So, it has requested the National Board of Revenue (NBR) to consider tax waiver on the import. The revenue board has sought suggestions from the BB to settle the matter.
Foreign exchange policy department of the central bank has preferred tax-free import of US dollar notes.
"If it is necessary, nominal duty can be imposed on the basis of the weight of the consignments," the BB said in a letter.
Prices of dollar in the curb market have increased sharply due to shortage of the currency in banks. The sellers of dollar are now much interested to sell the currency in curb market than to banks, it added.
A senior customs official said the NBR is yet to take any decision regarding the matter.
SCB is set to import $10 million foreign currency from travelex London, as current demands cannot be met by the existing currency notes.
Presently, foreign currency import is subject to payment of 5.0 per cent customs duty, 15 per cent Value Added Tax (VAT), 5.0 per cent Advance Income Tax (AIT), and 3.0 per cent Advance Trade VAT (ATV).
The central bank enjoys full tax waiver on import of foreign currency, but it is nearly 27 per cent for the private commercial banks.
Bangladesh Bank (BB) has preferred tax-free import of US dollar to keep balance on prices of currencies in cash and currencies imported through banking channel.
The central bank has said the prices of US dollar will be volatile, if the government charges duty taxes on face value of imported dollars.
Earlier, the BB allowed the Standard Chartered Bank (SCB) to import foreign currencies worth $10 million to meet the demands of the local market.
The SCB has found that it will have to pay 26.5 per cent of the foreign currency as tax to import the currencies. So, it has requested the National Board of Revenue (NBR) to consider tax waiver on the import. The revenue board has sought suggestions from the BB to settle the matter.
Foreign exchange policy department of the central bank has preferred tax-free import of US dollar notes.
"If it is necessary, nominal duty can be imposed on the basis of the weight of the consignments," the BB said in a letter.
Prices of dollar in the curb market have increased sharply due to shortage of the currency in banks. The sellers of dollar are now much interested to sell the currency in curb market than to banks, it added.
A senior customs official said the NBR is yet to take any decision regarding the matter.
SCB is set to import $10 million foreign currency from travelex London, as current demands cannot be met by the existing currency notes.
Presently, foreign currency import is subject to payment of 5.0 per cent customs duty, 15 per cent Value Added Tax (VAT), 5.0 per cent Advance Income Tax (AIT), and 3.0 per cent Advance Trade VAT (ATV).
The central bank enjoys full tax waiver on import of foreign currency, but it is nearly 27 per cent for the private commercial banks.