VAT on local corn oil at the production and trading levels is likely to be exempted as the Trading Corporation of Bangladesh (TCB) wants to include the item in the list of its essential items.
The move is aimed at selling the item at lower prices among the low-income TCB beneficiaries, officials say.
The state-run trading agency recently requested the commerce ministry to take steps in this regard.
When contacted, a ministry official said, "We have received the proposal sent by the TCB. The ministry is working on it. The VAT issue is a matter of the National Board of Revenue (NBR)."
Currently, there is a 15 per cent VAT on the production, and a 5 per cent on the trading, of local corn oil.
No VAT is applicable to corn production, semolina made from corn, and corn seeds at the trading stage, the TCB letter mentioned.
It argued domestic traders with small capital would be able to invest in the sector and expand it if corn oil producers get VAT exemptions at the production and trading levels. As a result, the import dependency on edible oil would reduce and a huge amount of foreign currency would be saved, the letter said.
Besides, a large number of jobs would be created, which would reduce the unemployment rate in the country.
Moreover, the TCB would be able to buy corn oil from local producers at comparatively low prices, the letter said.
It said if producers get VAT exemptions, the low-income families could buy edible oil at lower prices during the TCB's essential sales drives.
At the same time, the government would have to provide lower subsidies for the drives.
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