Bangladesh moves to scrap import taxes on 100 items to boost trade with US

Highlights:

• Government may remove import taxes on about 100 products
• Items include machinery, textiles, medical gear, fire safety tools
• Tax cuts must apply globally, per World Trade Organization rules
• Officials expect minimal revenue loss from proposed tax removals
• Move seeks to reduce Bangladesh-US trade imbalance significantly

The government is considering the removal of import taxes on approximately 100 products to facilitate trade with the United States amid negotiations between the two countries over tariff rates.

The proposed list includes a variety of items such as machinery, parts, raw materials for ready-made garments, man-made fibres, wool, effluent treatment plants, dialysis filters, fire extinguishers, and certain arms. The current tax rate on these goods is as high as 37%.

Officials from the National Board of Revenue (NBR) told TBS that these plans were discussed during a meeting with Chief Adviser Muhammad Yunus ahead of the national budget for the fiscal 2025-26.

A senior NBR official, who preferred not to be named, said, "We have identified 161 tariff lines (products) that could be imported from the US. Among these, import taxes on 100 items may be entirely removed."

The official clarified that in accordance with World Trade Organization rules, the removal of import taxes on these products would apply to imports from all countries, not just the US. "However, it is expected to significantly boost imports from the US."

NBR data shows the 161 products under consideration were imported at a value of approximately Tk28,000 crore in FY24, generating about Tk610 crore in revenue.

The officials believe that the revenue impact of removing import taxes on the selected products would be minimal. Therefore, the government anticipates that this measure will not result in substantial revenue loss, but will increase import opportunities from the US, ultimately helping to reduce the trade imbalance between the two nations.

The Trump administration on 2 April imposed significant tariffs on various countries, including a 37% tariff on Bangladeshi products. Previously, Bangladeshi goods entering the US faced tariffs of around 15%. The US government later retained 10% and suspended the remaining portion for three months.

Bangladesh has started negotiations with the US to explore ways to reduce the trade gap. The proposed import tariff reductions are part of these efforts.

In FY24, Bangladesh imported goods worth $2.2 billion from the US, while exporting $8.4 billion, making the US Bangladesh's largest export market.