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Onion import is now made duty-free and sugar duty cut down in the government's bid to shoot down galloping prices of the two essentials, amid recent general price rises.
Officials said the National Board of Revenue (NBR) accorded the tax benefit on import of onions and sugar in a bid to keep prices stable on the local market.
The customs wing of the NBR waived 5.0-per cent Customs Duty (CD) on onion import while reduced regulatory duty (RD) on the import of sugar by 10 percentage points.
The waiver would be valid until December 31, 2021, for onion and the cutback until February 28, 2022 for sugar import.
The NBR issued two separate Statutory Regulatory Orders (SROs) Thursday making the reduced import taxes effective.
As of now, import of onions had required paying 5.0-per cent CD.
The RD on import of sugar is reduced to 20 per cent from earlier 30 per cent.
However, the import of sugar also requires paying specific duty on the basis of the volume of import.
The prohibitive taxes on sugar import were meant for protecting the domestic sugar industry, but the country's sugar mills themselves appear to have met their nemesis for what critics say giving the refiners of imported sugar a trade bonanza.
As per SRO, onions (wrapped/ canned 2.5kg) and onions (other) under two HS code 0703.10.11 and 0703.10.19 would be entitled to the reduced tax rate.
"Raw sugar not containing added flavouring or coloring matter: beet sugar, cane sugar (specified in subheading note 2 to the first schedule of customs), other cane sugar under HS codes 1701.12.00, 1701.13.00 and 1701.14.00 would enjoy the reduced tax rate," says the SRO.
Talking to the FE, a senior customs official said the tax has been waived to rein in prices of the two essential commodities following a request of the Ministry of Commerce.
The NBR set the timeframe for onion until December 31, 2021 "considering country's onion-harvesting period for protecting interests of the local farmers".
During the last two weeks-marked as the post-Covid general reopening process-the prices of onions and sugar both have been on an upturn, coupled with rises in prices of many other commodities.
On Thursday, a kilogram of the local variety of onion was selling between Tk 70 and Tk 75 against Tk 40-45 a couple of weeks back.
Sugar tasted sour to many. The sweetener sold at Tk 80 a kg on the retail market on Thursday against already-high retail rates of Tk 65 and Tk 70 a kg a couple of weeks back.
Supply shortages from the source countries of those two essentials are blamed for surging prices. However, analysts are skeptical of this argument.
Traders, however, expressed the hope that prices would gradually come down following NBR's SRO on tax waiver.