Agro processing sector getting additional support to boost exports: NBR chairman

The government is placing increased focus on the agro-processing sector as a key driver of export growth, according to National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem.

During a pre-budget discussion at the NBR building in Agargaon on Wednesday (14 February), he said, "The agro-based food sector offers significant potential for value addition, making it crucial to our export ambitions."

He highlighted the vast market opportunities in various countries, including in Africa, underlining the government's commitment to providing "all kinds of logical support" to capture this market share. However, he cautioned against any misuse of this opportunity.

Challenges faced by the cold storage industry were also discussed. 

Eshtiaque Ahmed, senior vice president of the Bangladesh Cold Storage Association, announced plans for a trial run storing carrots in three chambers, aiming to gradually increase capacity.

He highlighted the need for support, including increased import duties on carrots, to make local cold storage businesses competitive, encourage carrot cultivation by farmers, and reduce reliance on imports, which reached 12,500 metric tons last year.

Abu Hena Md Rahmatul Muneem acknowledged the existing 58% import duty on carrots and reaffirmed the government's support for industry growth. He reiterated the goal of minimising agricultural product imports.

The Bangladesh Agro Processors Association proposed reducing the source tax from 7% to 2% for paddy, aligning it with other food items like rice and puffed rice.

In response, the NBR chairman announced a waiver of VAT at the production stage for flattened and puffed rice, with VAT subsequently applicable only to packaged products.

Shamsul Arefin Khaled, president of the Feed Industries Association, called for a reduction in the corporate tax rate for the industry from 15% to 5%. He also requested duty-free imports of alternative feed ingredients from India and the inclusion of some ingredients in the Statutory Regulatory Order (SRO) of duty-free goods.

These measures, according to Shamsul Arefin Khaled, will lead to a decrease in feed costs and contribute to lower egg and chicken prices.

The Bangladesh Fertiliser Association raised concerns about fertilisers being assessed at higher-than-actual prices, citing GTZ fertiliser as an example.

They requested assessments based on actual prices and urged the inclusion of specific HS codes in the SRO to ensure VAT exemption for certain fertilisers. Additionally, the association sought tax-free status for trade organisations.

Meanwhile in another programme, Foreign Minister Hasan Mahmud has said the country has set a target of exporting $10 billion worth of agricultural products in the near future, with a specific target of $3 billion for this year.

"Agricultural product exports amounted to $1 billion in the last fiscal year and we want to diversify the export basket beyond ready-made garments," he said while addressing an international seminar, "Economic Diversification and Global Market: Bangladesh's Opportunities and Way Forward".

Bangladesh Institute of International and Strategic Studies (BIISS) organised the seminar at its auditorium in the capital on Wednesday.

In the keynote presentation, Mahfuz Kabir, research director at BISS, said exports of non-RMG goods were $8.6 billion in FY23. Home textiles, jute and jute goods, leather goods, cotton and cotton goods, non-leather footwear, and headgear were major non-RMG items.