NBR in dilemma over tax benefit on edible oil import

The National Board of Revenue (NBR) is in a dilemma over offering a fresh tax benefit on import of edible oils considering revenue impact.

A proposal from the Ministry of Commerce (MoC) to consider tax benefits on the essential commodity for Ramadan is under review in the tax authority now.

A senior official of the NBR said offering tax exemption became a complex procedure now after the tax expenditure policy limits NBR power to do so.

"Either the Advisory Council or parliament of an elected government would decide tax waiver issues," he said.

However, an assessment of the NBR says the government will lose Tk4.0 billion revenue every month if it waives taxes on edible oil.

Last year, the NBR offered tax benefits on edible oil import that expired on June 30, 2025.

The government collects Tk40 billion valued added tax (VAT) at the import stage, Tk6.0 billion VAT at the local production stage and Tk 100 million VAT at the trading stage

VAT officials said the NBR has so far remained rigid on not offering the tax waiver, but if the government instructs to do so for stabling prices during Ramadan, it may consider offering some tax benefits at the trading and local manufacturing stages.

The official, however, said offering tax waivers at local production and trade stages for two to three months for Ramadan would cause a nominal around Tk 700 million revenue loss.

TK Group director Shafiul Atahar Taslim said waiver of taxes for a certain period of time does not help industries but to create more hassle.

"We have already imported crude edible oil paying 15 per cent VAT; so if the government waives taxes now, companies would be forced to cut prices immediately," he said.

Tax only is not the problem as other factors such as gas, power, and raw material import also matter on prices of edible oil, he added.

AHM Shofiquzzaman, president of the Consumers Association of Bangladesh, said there would be no immediate impact if the government reduces tax.

However, consumers may get reduced prices in Ramadan as it takes one to two months to import new consignments of edible oil, he said.

The issue on edible oil came under discussion recently after the commerce adviser alleged that edible oil companies have increased prices without approval of the commerce ministry.

However, the tariff commission later fixed the prices of bottled soybean oil at Tk 195 a litre, up from the previous price of Tk189.

Tax benefit on edible oil import expired in June 2025.

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