BUILD urges expansion of scope

Business Initiative Leading Development (BUILD), a public-private dialogue platform, has urged the expansion of the scope of duty-free raw material import facilities for non-bonded exporters to drive export diversification.

It made the call on Thursday at a dialogue titled "Duty-Free Import of Raw Materials beyond Bonded Warehouse Facility" to address the implementation challenges and propose critical reforms for the recently announced SRO 384/2025.

The event, held at the BUILD office in the capital, brought together policy experts, government officials, and private sector leaders to identify strategies for enhancing export competitiveness among non-bonded and small-scale exporters.

In the keynote presentation, Md Nooruzzaman, senior research associate at BUILD, highlighted that non-bonded exporters would import raw materials duty-free against a 100 per cent bank guarantee, which would be difficult to afford for them as the guarantee would be encashed after the realisation of the export proceeds.

This would limit their cash flow, he said.

To qualify for this facility, exporters must ensure a minimum of 30 per cent value addition and maintain mandatory VAT compliance through regular online submissions, he noted.

However, the facility was currently restricted to only eight sectors, including furniture, electronics, and light engineering, which limited significant export potential, Nooruzzaman added.

The working session was moderated by Dr Wasel Bin Shadat, research director at BUILD.

Mohammad Naziur Rahman Miah, first secretary at the National Board of Revenue (NBR), lauded the event and stated that formulating SRO 384 was a challenging task, and it was not a fixed document.

It would be updated as per requirements with the passage of time, he also said.

He added that eight sectors had been listed due to their interest and more would be included if they showed interest.

Md Shahidulla, senior deputy secretary at the Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA), noted the local VAT authority was the controlling point and those willing to get benefits from the system would have to hold the import registration certificate (IRC) and the export registration certificate (ERC), different from the customs bond commissionerate (CBC) licence holders.

He referred to the full operationalisation of the Duty Exemption and Drawback Office (DEDO) to provide support to exporters.

Saifur Rahman, vice president of the Bangladesh Stainless Steel Pipe Manufacturers Association, emphasised ensuring ease of doing business for export diversification and highlighted that the government needed to focus on dynamic decisions.

Md Abdur Rauf, chief executive officer of the Bangladesh Furniture Exporters Association, urged the government to lay emphasis on the value addition criteria instead of UP, UD, and bank guarantee in case of export facilitation.

He also recommended reducing the lead time, saying strong punitive measures against misusers of facilities could bring discipline.

MS Siddiqui, chief executive officer of Bangla Chemical, said revenue policies should be adopted by independent bodies instead of concentrating all the power within NBR.

Shoaib Hasan, former vice president of Bangladesh Agro-processors Association (BAPA), urged to allow 30 per cent duty-free import of raw materials based on export performance and noted that if this incentive was given, export volume could double.

Mainul Islam, deputy manager at the SME Foundation, urged the NBR to align with the Ministry of Industries in formulating policies and recommended including the priority sector of the National Industrial Policy 2022 and the Product of the Year declared by the Ministry of Commerce annually in the positive list.

Sharif Nawrin Akter, assistant general manager at the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), said the bank guarantee realisation should be done in different phases.

According to Sharif, as per clause 2 of the SRO, the time limit for export is nine months. If the time cannot be maintained, it can be extended for another three months, which is very low. It could be at least two tax periods considering order cancellations or the delay in realising proceeds.

Shankar Kumar Roy, executive director at the Bangladesh Cement Manufacturers Association, urged to incorporate the cement sector in the positive list of the SRO due to its huge domestic use.

At the end, Ferdaus Ara Begum, chief executive officer at BUILD, said BUILD had taken full notes of the discussion and would prepare a report and share it with NBR for necessary reforms in the SRO.

The reforms would allow small and medium enterprises (SMEs) to get benefits from the policy, the dependency on a single product would reduce, and exports would diversify, she added.

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