Govt rolls back fuel oil import duty decision over price hike concerns

The parliament has passed the Finance Bill 2023 withdrawing the proposed mandatory minimum tax of Tk2,000 by all TIN holders to avail 43 types of services. 

Following the budget proposal, Prime Minister Sheikh Hasina asked the finance ministry officials to scrap the proposal of the minimum tax, considering the ongoing inflationary pressure on lower-income people.

The Finance Bill 2023 was passed in the Parliament on Sunday.

The bill also excludes the proposed Tk13.75 per litre specific duty on the import of 11 types of fuel oils due to concerns over potential price increases at the consumer level. 

In response to requests from several divisions, including the commerce ministry, the government has opted to maintain the previous rules, which include a 10% customs duty.

Furthermore, the existing 7.5% VAT on the collection of aluminum scrap has been withdrawn.

For the upcoming fiscal year, the government had initially proposed replacing the existing duty on 13 imported petroleum products with a specific duty, reaching a maximum of Tk13.75 per litre.

On 1 June, the finance minister proposed a specific duty of Tk13.75 per litre for 11 petroleum products, including kerosene, light diesel, motor spirit, and jet fuel.

Presently, major fuel oils such as furnace oil, jet fuel, diesel, and octane attract a total of 34% government duties and taxes, consisting of a 10% duty, 15% VAT, 2% advance income tax, and 5% advance tax. 

By eliminating the advance tax, the overall tax ratio on fuel oil prices will decrease to 29%.

The bill also completely exempted the value-added tax (VAT) on ball pens, which was proposed at  15%.