The Ministry of Power, Energy and Mineral Resources has proposed reducing value-added tax (VAT) on imported liquefied petroleum gas (LPG) to below 10 percent by restoring a 15 percent VAT exemption at the import stage, in a bid to address the ongoing supply crunch.
In a letter sent to the National Board of Revenue (NBR) on Thursday, the ministry also suggested exempting locally produced LPG from the current 7.5 percent VAT, as well as removing VAT at the trader level and advance income tax.
According to the ministry, around 98 percent of the country’s LPG demand is met through imports by private firms, with the fuel widely used in households and industrial operations.
The letter noted that LPG supply usually becomes constrained during the winter months, both at home and abroad, pushing up prices. Demand also increases in winter due to limited availability of piped natural gas, further heightening dependence on LPG.
“These factors have created a severe shortage of LPG in the market, disrupting daily life,” the ministry said.
The issue was discussed at a meeting of the advisory council on 18 December, where the Internal Resources Division viewed it as appropriate to withdraw the existing 15 percent VAT exemption at the import stage and replace it with a reduced 10 percent VAT, along with exemptions at the production and trading stages.
Following the discussions and consultations with leaders of the LPG Operators Association of Bangladesh (LOAB), the ministry formally submitted its recommendations to the NBR.
Meanwhile, the LP Gas Traders Cooperative Society has announced an indefinite nationwide strike starting today, halting the marketing and supply of LPG while pressing for higher distribution and retail margins.
Bd-pratidin English/ ANI
