Now sunflower, canola oil get import tax exemption, VAT reduction

The government has exempted import tax and lowered value-added tax (VAT) to 5% on sunflower and canola oil, aligning it with other edible oils.

This reduction, outlined in an SRO issued by the National Board of Revenue (NBR) on 15 December, which officially published today (16 December), will remain in effect for three and a half months.

The existing import tax and reduced VAT rate for soybean and palm oil has also been extended until 31 March, as part of efforts to increase supply and stabilise the market for essential cooking oils, according to a press release of NBR on 16 December.

In the past, VAT was levied on imports, local refining, and trading stages at a reduced rate.

"Previously, the import tax exemption and reduced VAT facility for soybean and palm oil through two orders in October and November was in force till 15 December. In order to keep the edible oil market stable and keep prices affordable, sunflower and canola oil have also been added to this list," said the NBR press release.

As a result, the import cost of sunflower and canola oil could be reduced by about Tk50 per liter, it also mentioned.

At present, Bangladesh imports only a small quantity of sunflower and canola oil, as these oils are significantly more expensive than soybean and palm oil.

Due to rising prices of soybean and palm oil, local edible oil importers are considering increasing imports of sunflower and canola oil.

The NBR official explained that VAT revenue from these oil imports is minimal, around Tk2 crores for the last fiscal year.

Importers have said if VAT is reduced further, they might import more sunflower and canola oil, potentially lowering their prices.