Decline in some major imports hits govt revenues

Import volume of some major revenue- generating products declined in the last fiscal year with resultant fall in government's collection of customs duty and taxes.
Out of the ten sources of revenues, some 70 per cent are industrial raw materials used in power plants, manufacturing units, construction of building structures while the rest are fruits and sugar.
Those ten products contribute 26 per cent to the total customs revenue out of more than 6000 products or tariff lines.

Six of the products, which contribute the highest volume of import taxes, dropped up to 27 per cent in the FY 2022-23, according to latest data available with the National Board of Revenue (NBR).
The products include furnace oil, sugar, pre-fabricated steel sheet, bitumen and orange.
However, import volumes of apple, coal, stone, and high-speed diesel increased in the period.
Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD), says the decline in import of industrial raw materials and capital machinery may leave adverse impact on the country's GDP growth.
"Domestic consumption has decreased due to high inflation and economic recession while manufacturing industries faced hindrances to opening letters of credit (LC) due to dollar crisis," he mentioned.
Under the circumstances, a combination of three-tier factors-inflation, dollar crisis and squeezing consumer demand-reduced productive-capacity utilization of the country.
The NBR data show receipts from the top ten revenue-contributing products increased 8.0 per cent last year despite fall in import volume because some of those products saw duty hike.
The customs wing of the NBR collected Tk 244.96 billion in the FY23 from the ten imports against Tk 264.95 billion in the previous fiscal.
Import of apple in terns of volume increased 17 per cent in spite of substantial hike in its import duty.
Sugar import declined by 24 per cent last year, resulting in a negative growth in customs' revenue collection from the product by 4.0 per cent. The NBR received Tk 1.70- billion less revenue from sugar imports compared to that of the corresponding period last year.
On February 2023, the NBR had cut import duty by 5.0 per cent and waived specific duty on import of sugar under government action to tame market overheating. The cuts remained valid until May 30.
Data collected from the ministry of commerce show the import of sugar from India dropped by 72,000 tonnes in a year due to dollar shortage and suppressed consumer demand due to inflation bites.
The government could not import sugar through inviting international tender due to price hike of the sweetener on the global market in the past year.
Country's annual demand for sugar, an import-dependent commodity, is around 2.0 million tones that is being imported through Chittagong seaport from Brazil and Argentina and through Benapole land-port from India.
Mahmudul Hassan, Deputy Chief of Bangladesh Trade and Tariff Commission (BTTC) explains that demand for sugar is linked with that of wheat that dropped last year due to global unrest, especially in the grain hub.
"Consumption of sugar was reduced as demand for bakery items and other products went down following price hike," he says.
Customs-duty collection from import of furnace oil declined by Tk 15.94 billion or 28 per cent as its import volume decreased by 27 per cent last year.
However, the state-owned Eastern Refinery is producing around 0.3 million tonnes of furnace oil every year.
Both Independent Power Producers (IPPs) and Bangladesh Petroleum Corporation (BPC) sources said it could not import furnace oil as per demand of the country's power plants due to dollar dearth. Some 27 per cent of the country's power plants run on furnace oil. Annual demand for furnace oil is 5.0 million tonnes, and major share is being imported by the IPPs.
The furnace-oil import declined by 12,44,911 tonnes last year, according to customs data.
Import of clicker, a major raw material for cement, dropped by 1.0 per cent in terms of volume. However, revenue collection from the product increased by Tk 3.15 billion or 11 per cent from the products, evidently for higher invoice valuation for price rises.
Import volume of stone surged up by 42 per cent while revenue collection from the product rose by 72 per cent.
Officials said Bhomra, Hili, Tamaabil and Banglabandha are the entry point of stone used for different megaprojects of the government.
Due to dollar crisis and price hike, import of stones had faced a blow earlier in 2022 but rebounded in 2023.
Pre-fabricated steel-sheet import dropped by 13 per cent in terms of volume and 18 per cent in terms of revenue collection.
Import of coal rose by 16 per cent while High Speed Diesel by 33 per cent. And the two products have contributed 78 per cent and 38 per cent higher customs duty respectively.
Last year, the NBR collected Tk 927.32 billion in customs duty with a poor 3.70-percent growth over the corresponding period last year.
Collection of customs duty- taxes lagged behind its target by Tk 182.67 billion in FY 23.
In a recent coordination meeting at Internal Resources Division (IRD), the NBR chairman and Senior Secretary of the IRD, Abu Hena Md Rahmatul Muneem, instructed the customs authority to investigate the reason for sluggish growth in revenue collection by scrutinizing import-export data.
He also asked for holding a meeting to review the reason for slide in import-revenue collection last year.
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