Duty on edible oil to be withdrawn

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The government is going to withdraw customs duty on imported edible oil and considering a new programme to help the middle class cope with soaring prices of essentials.

“We have taken a number of steps and more actions are being planned to mitigate the impact of the price increase on people,” Finance Adviser Mirza Azizul Islam told journalists yesterday.

Meanwhile, a Bangladesh Bank (BB) official said the central bank is going to fix a special interest rate of 12 percent on loans for importing powdered milk. The special interest rate will be enforced to keep the milk powder prices stable in the country, the BB official added.

“We have decided to withdraw 10 percent customs duty on imported edible oil and the NBR [National Board of Revenue] will issue orders in this regard within a couple of days,” the finance adviser said while talking to reporters after a meeting with a team from the International Monetary Fund (IMF). The IMF team is now visiting Dhaka to discuss NBR reforms issues with the government.

Asked if the government, in addition to its safety net programmes geared toward the impoverished section of the country, is planning any measures for the middle class who are also affected by the price inflation, Mirza Aziz said, “We are considering it.” However, it is difficult to define the middle class and the government needs to precisely define the target group so the programme can bring positive results, he added.

Blaming the international market for the high prices, the adviser said the government can do very little when the food prices are very high on the international market. There is adequate supply of foods in the local market, he said adding, “We are taking measures to keep the impact of price inflation to a tolerable level.”

The IMF team during its meeting with the finance adviser made suggestions for modernising the taxation system by bringing reforms in the VAT (value added tax) collection system and the income tax act in a bid to increase revenue collection.

Mirza Aziz told reporters that the IMF team provided the government with a draft of suggestions incorporating possible changes in the Income Tax Act 1984 and the VAT system. “The NBR is now examining the possible changes in the Income Tax Act 1984 as well as the VAT system. Decisions in this regard will be taken later,” he added.

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