Higher tariffs on 330 products proposed to reduce imports

The Bangladesh Trade and Tariff Commission has recommended capping imports by raising duties and tariffs on 330 non-essential items such as foreign fruits, gold, liquor and beer, smartphones, cars, air conditioners, refrigerators and spices.

According to a commission report, the measure will help ease the ongoing US dollar dearth in the local market and provide relief to the depleting forex reserve.

The commission has sent the report to the commerce ministry recently, which, however, warns that the import curb may hurt import duty collection and prompt hoarding-led price hike.

In FY22, Bangladesh spent $82.50 billion for imports as exports fetched the country $49.24 billion, registering a $33.24 billion trade deficit.

The government has been undertaking several measures for the past couple of months to ease the dollar crisis. As part of the initiatives, the commission has come up with the report.

According to Bangladesh Bank data, non-essential items accounted for around 30% of import bills in FY22. The single largest sector of import expenditure was the import of non-essential goods.

The Tariff Commission's list of non-essential goods includes cigarettes, cigars or tobacco products, mangoes, oranges, fresh and dried grapes, watermelons, apples, pears, palm fruits, cherry, strawberries, kiwi fruit, coffee, green tea, tea leaves, pepper, cinnamon, cloves, pasta, biscuits, wafers, cakes, bread, jam-jelly, all kinds of fruit juice, soy sauce, tomato ketchup, soup, ice cream, water, salt, cashew nuts, pistachio nuts, pine nuts, betel nuts, dates, figs and avocados.

There are also plastic plates, bath tubs, kitchen basins, doors and windows, women's handbags, suitcases, leather belts, plastic boards, fire doors, cigarette paper, cotton fabrics, printed fabrics, carpets, three-pieces, hand fabricated lace, umbrellas, plastic flowers, marble-granite, imitation jewellery, interspersed ceiling tiles, ceramic sinks, bathroom fittings, interspersed glassware, tableware, sanitaryware, razors, blades, electric wire, all types of locks and keys, all types of fans, air conditioners, deep fridges, refrigerators, washing machines, microwave ovens, electric ovens, home appliances, smartphones, speakers, all types of cars, bicycles, wall clocks, alarm clocks, car seats, wooden furniture, video games, cards, table tennis and tennis equipment, balls (golf, table tennis, tennis) and fishing rods.

Besides, the report recommended controlling import of gold ornaments and gold bars.

Currently, the import of gold bars under the baggage rule requires a customs duty of Tk2,000. It is recommended to increase it to Tk3,000. It has also recommended imposing a 10% supplementary duty on smartphone imports.

It has been recommended to temporarily discourage imports of those products which are not likely to have an adverse effect on industrial production.

On the other hand, it has been proposed to increase the duty and tax of all the consumer goods generally used by the rich.

The report also underscores checking misuses of raw materials imported under a bond facility to save the greenback. The commission notes that proper storage management of exporting items can also save the foreign currency.

As the import curbing may drive up import by misdeclaration, under invoicing and smuggling of the goods, the commission calls for intensifying market monitoring.

Appreciating the proposal by the tariff commission, Prof Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD), said import of items which are already being manufactured locally should be discouraged. On top of that, the authorities should provide local manufacturers with more policy support.

He also called for strengthening market monitoring and stringent measures to check misdeclaration, under and over invoicing.