Consumers get no benefit from import tax cut

The premise on which import taxes were cut on a host of essential items in a bid to lower prices in kitchen markets in Bangladesh has essentially backfired. In the process, the national board of revenue (NBR) has lost earnings and no cost benefit has been passed on to end users. The only gain here has been made by the companies involved with the supply chain of those sensitive products. While the NBR move was a logical step, one wonders how much more profit companies that control the wholesale business of commodities need to squeeze out of consumers!
According to a report published recently in this newspaper, "Intended impact of the tariff readjustments is in doubt amid price rises of all commodities---be that local or imported---and that prompts the government's revenue board to begin a crosscheck to determine whether the benefits are being passed on to the consumers." The fact that the customs wing of the NBR has finally started assessing prices of commodities like rice, lentils, edible oils, onions, wheat, sugar, eggs, potatoes, beef, fish, apples, oranges, chickens, poultry and fish feeds after and before tariff cuts is a step in the right direction.
It seems business interests feel confident enough to fleece both the national treasury and consumers without facing any blowback. Bloated prices at the primary dispersal point have a chain effect down the line. Recent media reports have unravelled how consumers are being fleeced by retailers courtesy of tampered digital weighing scales at grocery shops and kitchen markets. These weighing scales had been introduced to fix tampering in the market, but dishonest retailers have tampered with it.
Now, the revenue board is looking at data of the last three consecutive years using tariff cuts as the basis for this analysis. This comes against the backdrop of a demand for a closer look both from government and private industry, which are all paying though the nose and passing the costs on to the consumers. This price increase may benefit unscrupulous business interests, but it has hit the people hard across broad segments. As per Bangladesh Bureau of Statistics (BBS) data, inflation had reached 9.93 per cent in October which had been 9.63 per cent in September. Food inflation outstripped the general inflation to 12.56 per cent in October.
Now with the NBR getting its acts in order, it may be possible to deduce precisely how the market price manipulation has been going on for most of 2023 that has drastically weakened the consumers' purchasing capacity in putting the right food in the right quantity on the family table. Some point out to the increased cost of doing business due to depreciation of Bangladesh Taka against the dollar, the paucity of letters of credit and the foreign exchange crunch, increased transportation costs due to increase in fuel prices, etc. Unfortunately, none of those excuses can explain the astronomical increase in prices on a weekly basis for items, import of which has been allowed to happen.
It is logical for the authorities to do an in-depth evaluation of why lowering of taxes has not helped bring down prices of goods in the market. In some cases, tariff cut has been followed by a price increase which defies logic and market rules. This is hardly surprising. In a country where government intervention so far has been a reactive ---one that is docile rather than proactive, offenders have got their ways unimpeded. Anti-racketeering measures were the right set of tools to fight the malpractice. The findings of the current study are likely to provide the government with the tools it needs to bring to heel these racketeering buccaneers.

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