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The government has halved specific customs duty on sugar import to rein in its prices in the local market amid skyrocketing prices in the international market.
The import duty on raw sugar brought down to Tk 1500 and refined sugar to Tk 3,000 per tonne, according to a Statutory Regulatory Order (SRO) issued by the customs wing of the National Board of Revenue (NBR) on Tuesday.
The duty-cut comes following requests by the Ministry of Commerce (MoC) and the industry.
Industry insiders, however, thought the marginal cut in the import duty is unlikely to be that much effective in bringing down the prices at the local market with having VAT, Regulatory Duty, Advance Tax, Advance Income Tax (AIT), and Supplementary Duty (SD) applicable on import of sugar.
Biswajit Saha of City Group said the volatile dollar prices and high international prices are major reasons for high prices of sugar in the local market which would not come down with the latest changes.
Tax burden on sugar is relatively high, Tk 43 per kilogram, while the cut in CD would have a contribution equivalent to Tk 1.5 only, he added.
A senior customs official said the consumers do not get the tax-cut benefits as businesses maximise their profits at the cost of revenue. "Previous tax-cut experience on sugar is not welcoming," he added.
Unless the consumers get the benefit out of the measure, the changes in import taxes on essential commodities only cost the public exchequer, he added.
Earlier, the MoC recommended withdrawal of CD, and reduction of RD on import of sugar to control its prices at the consumers' end.
A top executive of a renowned sugar refiner said the international price would be the major factor in determining the local prices of sugar despite the duty-cut measure.
Meanwhile, a Malaysian government-linked company (GLC) expressed its interest to export sugar to Bangladesh as it requested the commerce ministry to take necessary steps for a government-to-government (G2G) arrangement in this regard.
The ministry was working on it but yet to make any decision in this regard, said an official.
The company, MSM Malaysia Holdings Berhad, the largest sugar refiner in Malaysia and one of the top 10 worldwide, in its recent proposal suggested that it was a great opportune time for Bangladesh and Malaysia to extend bilateral relations.
It said the adverse effects of the Ukraine war and the rising costs of fuel, food, and commodity products have placed additional burdens and pressures on the budget and foreign currency reserves of Bangladesh.
The adverse weather conditions affected the sugarcane crop and caused a shortage of local sugar production, it added.
The Malaysian company has a refining capacity of 2.05 million tonnes per year with specialisation in the production of high-quality ICUMSA 45 white refined sugar, available in both coarse and fine grains.
It also expressed the interest to discuss a suitable financing package supported by the EXIM Bank of Malaysia with a Framework Supply Agreement to maintain the supply chain during this crisis period, reads the proposal, obtained by the FE.
In the domestic market, sugar has become both scarce and expensive despite various steps taken by the government to bring the situation under control.
Currently, sugar is being sold at rates higher than the government-fixed prices, according to market sources.
The annual demand for sugar in Bangladesh is 2.0-2.2 million tonnes. Some 2.2-2.4 million tonnes of raw sugar is imported annually.
More or less 50,000 tonnes of refined sugar is imported annually, according to the Bangladesh Trade and Tariff Commission (BTTC).