Weighing efficacy of tax cuts to arrest price hike

All the measures taken so far by the government to check unrestrained price inflation of essential commodities have come to a naught, thanks to the manipulative power of a section of market players. For instance, the government tried to fix the retail prices of potato, egg and onion through an executive order in August this year. But the traders simply refused to go by that order. Strangely, they could get away with the defiance. Alongside such supposedly strict measures, a softer approach adopted especially by the National Board of Revenue (NBR), to tame the essential market through slashing of import duty or even, in some cases, by outright withdrawal (of the import duty), also did not work. The latest example of such a method is cutting the import tariff on sugar by half early this month. But, paradoxically, far from leaving any positive impact on the price of sugar, the measure rather pushed up its level by Tk10 per kilogramme. As before, the arguments like global price hike of sugar, depreciation of Taka against US dollar, etc. were put forward to justify the price hike by those who control its market.
Similar measures were taken also in the past to rein in the essential price hike, but to no avail. Against this background, the NBR, of late, is learnt to have decided to examine if the steps so taken by way of reducing tariff on essential commodities including edible oils and sugar did actually have the desired impact on the market. To this end, the customs wing of the NBR is reportedly working to evaluate the consumer items' prices in the market before and after the tax reduction/exemption measures it had taken over the past few years till now. Notably, decisions on tariff cuts are often taken by the NBR following pressures from the relevant ministries as well as industries or traders' bodies. But, one wonders, if the efficacy of any such sporadic measure without going for a concrete analysis of the factors influencing prices of the commodities in question, did ever cross the mind of those who advised or recommended it.
Though the previous actions by the tax regulatory authority to this end did not follow such procedure, it is still welcome that the NBR has finally decided to have at least a post-implementation assessment of tax reduction measures it took previously to contain market volatilities of certain consumer items. Obviously, it will help provide valuable insights into the behaviour of the essential market. Admittedly, it is the standard practice to do such research before taking any step to influence the market. Had the government or its top tax regulatory body also followed this practice earlier, it could possibly draw better outcomes from actions like price fixation or tax cuts/exemptions applied so far.
Finally, it is one thing to have a better understanding of a situation, but quite another to bring about a real change in it. This is particularly so when it comes to the subject of market where any measure to take effect depends largely on the seriousness as well as the political will of the implementation authority concerned. Lessons learnt from previous experiences as well as from the present study undertaken by the tax authority may help the government devise a more effective strategy for containing the volatile market.