The European Union (EU) has requested the NBR to remove two long-standing tariff and regulatory bottlenecks, saying its resolution would send a strong signal of Bangladesh's commitment to improving the investment climate for European businesses.
The EU made the request recently in a letter to newly appointed National Board of Revenue (NBR) acting Chairman and Internal Resources Division (IRD) Secretary Ahsan Habib on July 6 last. Copies of the letter were also sent to the finance, commerce, and foreign affairs ministries.
The EU Ambassador Michael Miller in the letter called for harmonisation of import duties on milk powder and greater regulatory certainty for fully foreign-owned freight forwarding companies operating in Bangladesh.
The request, the ambassador said, reflects priority concerns of European businesses and forms part of the EU's broader agenda to remove non-tariff and regulatory barriers affecting bilateral trade and investment.
The intervention comes as Bangladesh seeks to attract more foreign investment and strengthen trade relations with key partners ahead of its graduation from the least developed country (LDC) status.
The EU has specifically sought harmonisation of the tariff structure on whole, skimmed and filled milk powder, arguing that the existing duty disparities distort market competition and complicate import planning and local manufacturing of nutrition-related products.
The EU also requested the NBR to clarify provisions in the draft Freight Forwarders Rules, 2025, particularly the licence renewal mechanism for fully foreign-owned freight forwarding companies.
The EU's concern relates to uncertainty over licence renewal and regulatory requirements for 100 per cent foreign-owned freight forwarding firms under the draft Rules, which European businesses fear may affect their long-term operations in Bangladesh.
"The matter reflects priorities for European businesses and are included amongst the priority requests of the EU to remove non-tariff and regulatory barriers affecting trade and investment in Bangladesh," Ambassador Miller said in the letter, noting that the issues had already been discussed with the commerce ministry.
The letter also referred to earlier representations made by the Embassy of Denmark in Dhaka on the same issues, signalling a coordinated position among European partners.
When contacted, NBR officials said the revenue authorities have received a letter from the EU regarding the harmonisation of milk powder duties and seeking clarity on freight forwarding rules.
"We are currently scrutinising the issues, and no decision has been taken yet," said an NBR official.
Officials at the Ministry of Commerce (MoC) said the EU's latest request underscores growing emphasis on regulatory predictability rather than tariff preferences alone, as Bangladesh prepares for a new trading environment following LDC graduation.
According to the letter, addressing the two issues would constitute an important confidence-building measure for European investors and demonstrate Bangladesh's willingness to foster a more transparent and business-friendly regulatory framework.
In the current national budget, the government's move to increase the tax burden on Filled Milk Powder (FMP), the country's most widely consumed milk powder category, has sparked concerns over a possible rise in consumer prices.
Under the new fiscal measures, FMP has been placed under a higher duty structure with a 25 per cent customs duty and a 5.0 per cent regulatory duty.
According to industry insiders, the cumulative tax incidence on FMP has reached around 64.25 per cent, making it significantly costlier than other powdered milk categories.
They argue that aligning FMP tariffs with other milk powders would ensure a level playing field, promote investment in the dairy sector and help keep nutritious food affordable for consumers.
A senior MOC official said the ministry is currently working to remove trade barriers, particularly non-tariff barriers faced by EU firms operating in Bangladesh.
The ministry has made significant progress in addressing the issue, he added.
rezamumu@gmail.com
