The interim government has decided to reduce the import duty on refined sugar in an effort to increase local supply and curb rising prices.
The National Board of Revenue (NBR) plans to reduce the current import duty on refined sugar from Tk 6,000 to Tk 4,500 per tonne, encouraging increased imports to stabilise the market.
This follows an earlier reduction on October 9, when the NBR halved the regulatory duty on raw and refined sugar imports from 30 per cent to 15 per cent. At present, the duty on raw sugar stands at Tk 3,000 per tonne, with refined sugar facing double that rate to discourage imports.
In addition to these duties, all sugar imports are subject to a 15 per cent value added tax (VAT), 15 per cent regulatory duty, 5 per cent advance tax, and 2-5 per cent advance income tax, depending on specific circumstances.
Bangladesh imports an average of 1.96 million tons of sugar annually, with 1.84 million tonnes being raw sugar and only 100,026 tonnes refined. Imported raw sugar is processed locally by a few dominant private companies, making the market reliant on them.
NBR Chairman Abdur Rahman Khan emphasized the importance of increasing refined sugar imports to ease supply pressures and noted that refined sugar can be brought to the market more quickly than raw sugar. The new duty reductions are expected to be implemented early next week.
Local sugar prices have surged due to rising international prices and the devaluation of Taka against the US dollar. High import duties have further inflated domestic prices, with sugar in Bangladesh costing more than double what it sells for in neighbouring India, contributing to smuggling issues.
A Bangladesh Trade and Tariff Commission report revealed that in the 2022-23 fiscal year, raw sugar imports were 4.57 lakh tonnes lower than the five-year average, while refined sugar imports fell by 13,000 tonnes. The price disparity with India, where sugar is sold for Tk 45-50 per kg compared to Tk 125-135 per kg in Bangladesh, has driven illicit sugar trade across the border.
According to the Trading Corporation of Bangladesh (TCB), sugar currently sells for Tk 125-135 per kg in local markets.
bd-pratidin/GR
