Grip tightened on four types of imports to save forex

Regulatory duty is hiked to a prohibitive 20 per cent on four types of imports in a latest government action for saving Bangladesh's limited foreign-exchange reserves amid global crunch time.
Fresh fruits, flowers, cosmetics and furniture are among the items put under the increased RD imposed by the National Board of Revenue (NBR).
The products fall under 135 tariff lines or HS codes which were subject to paying much lower duty ranging from zero to 3.0 per cent earlier.
The customs policy wing of the NBR issued a Statutory Regulatory Order (SRO) making the newly imposed additional taxes effective from Monday.
A senior official of the NBR says the measure has been taken to keep country's forex reserves stable by regulating import of some products.
In a press statement to substantiate the fiscal measure, the NBR said Bangladesh is rich in fruit and flower cultivation.
"Local farmers of those products would get fair prices and feel encouraged for production due to imposition of the RD," it said regarding horticulture and floriculture.
Also, local furniture and cosmetics industries have been producing quality products.
"Local industries would flourish with the imposition of the tax," the revenue board adds in the statement.
Bangladesh is ramping up belt-tightening measures to save its foreign-exchange reserves with fiscal interventions like increase in regulatory duty on nonessential imports and restricting foreign tours, among others. The government also relaxed remittance rules to net foreign currencies.
Amid the decline in the country's foreign-exchange reserves, the Bangladesh Bank has already imposed high margins against the opening of letter of credit (LC) on import of luxury and non-necessary goods to contain the surge in import payments.
As per central bank's order, importers of cars and home appliances will need a deposit of 75 per cent of the payment in advance while opening letters of credit. For imports of other non-essential products, the margin has been set at 50 per cent.
Amid dearth of dollar, meanwhile, the county's central bank went on devaluing the taka against the US currency.
Country's foreign-exchange reserves dropped to nearly $42 billion for increase in import-payment requirements from $48.04 billion in August last calendar year.
Alongside limiting the outflow of the dollar, the government relaxed the incentives rule to augment the inflow of the greenback. To encourage large inflow of remittance through legal channel, the central bank lifted the provision of mandatory submission of documents for availing 2.5-per cent cash incentives on inward remittances of over US$5000 or Tk 500,000.
The move comes in the wake of substantial decline in the remittance inflows. Official figures show that the inflow of remittance dropped over 16 per cent to $17.31 billion during the July-April period of the current fiscal year (FY), 2021-22, from $20.66 billion in the same period of the previous fiscal.
Sector-insiders say the inward remittance has decreased as hundi and other illegal channels became active again after withdrawal of the pandemic-induced travel ban.
Bangladesh is witnessing an increase in import of capital machinery, industrial raw materials, LPG, fuel oils and commodities from the overheating overseas markets, resulting in the ballooning of import payments from the limited reserves.

doulot_akter@yahoo.com