Duties on 50 products set to increase in next budget

The government is likely to increase duties on about 50 imported items in the new fiscal year to reduce demand for U.S. dollars, Finance Ministry officials said.

The National Revenue Board has already identified the items in consultation with the Bangladesh Bank ahead of the national budget to be announced on June 9 in parliament.

The items are likely large displacement automobiles, cosmetics, fruits, air coolers, refrigerators, fans, blenders, televisions, perfumes, jewelry, cookies, chocolates, toys, toiletries, ceramic products, light tubes, fruits, tableware and alcohol.

Finance Minister AHM Mustafa Kamal, who will announce the new budget, is expected to increase import and additional duties on selected items as part of government measures to curb strong import growth in the wake of the dollar crisis .

On May 24, the NBR increased the statutory duty by 20% on more than 100 non-essential goods.

Former Bangladesh Bank Governor Salehuddin said the high duty often failed to discourage traders from importing such products.

Importers could opt for airfreight which would increase costs if importing by inland waterway was restricted, he added.

Following an increase in import payments of a whopping 46.7% between July 2021 and February 2022, the country’s foreign exchange reserves fell to $42 billion, a 17-month low, from $48 billion. in August 2021.

The heavy import has also caused Bangladesh a trade deficit of $22.31 billion in the July-February period of the outgoing fiscal year.

The country’s ability to pay for imports has fallen to about six months from eight months after the Russian-Ukrainian war that began in late February made importing fuel oil, food and fertilizers more expensive for the country.

Amid dwindling reserves, the BB recently increased LC margins to 75% for the import of luxury goods, while the finance division banned non-essential overseas travel so that government officials save the greenbacks. for the country heavily dependent on imports.

Dollar price volatility continues in the local market despite the considerable devaluation of the local currency Taka against the US dollar over the past week.

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