Stop under-invoicing in sugar imports
Sugar refiners of the country recently complained that some importers are under-invoicing their shipments of refined sugar in a bid to make more profit from higher prices of the sweetener.
This practice is not only hampering local mills by reducing the competitiveness of their product, but also taking revenue away from the government, Bangladesh Sugar Refiners Association (BSRA) said in a letter to the National Board of Revenue (NBR) on May 22.
With this backdrop, the BSRA urged the tax administrator to tighten import regulations as well as determine an acceptable price for refined sugar in line with the current market situation.
The domestic sugar industry plays a crucial role in the economy by catering to the demand for the sweetener and employing a significant number of workers.
So, the BSRA's primary concern is to ensure market stability as any disruptions would not only impact the mills, but also put jobs at risk.
Bangladesh now requires about 20 to 22 lakh tonnes of sugar each year. Of this amount, local mills can produce just 30,000 to 35,000 tones, necessitating imports of raw sugar by the country's five refiners.
At present, the global market price for raw sugar stands at about $600 to $700 per tonne while it is $750 per tonne for refined sugar.
BSRA members dutifully pay huge amounts of tax when importing raw sugar, according to the letter.
As such, the hike in global prices has positively impacted the government's revenue collection from shipments of the sweetener, which surpassed Tk 5,000 crore last year.
However, recent media reports indicate that refined sugar is being imported for as low as $430 per tonne in certain cases.
This is because unscrupulous importers frequently understate import prices to evade duties and taxes, further highlighting the importance of price verification and regulatory measures, the BSRA said.
Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, one of the biggest commodity importers and processors in Bangladesh, said this matter has turned into a big problem.
So, the government should take appropriate action in this regard, he added.
Golam Rahman, secretary general of the BSRA and managing director of Deshbandhu Sugar Mills Ltd, said some importers are evading duty when bringing sugar into the country to make more profit.
On the other hand, businesses that are not engaging in this practice are suffering commercially.
"Such shipments are being imported through the Benapole and Chattogram ports," he added.
Rahman went to say that the customs authority should verify these accusations as only then will the truth be revealed.
Consumers are having to pay more than the government-fixed rate for sugar as local millers and refiners were forced to adjust their prices in line with higher production costs.
The ongoing US dollar and energy crises stemming from the Russia-Ukraine war led to market volatility since July-August last year, inflating global prices for raw sugar and fuel in the process.
After that, the government fixed the local price of sugar in three rounds.
On May 10 this year, the commerce ministry increased the price of loose refined sugar to Tk 120 per kilogramme while the price of packaged refined sugar was set at Tk 125 per kilogramme.
However, sugar is currently being sold for Tk 130 to 140 per kilogramme at retail.
About 95 per cent of the imported sugar is unrefined, according to NBR data, which shows that shipments mainly come from Brazil, India, Australia, the UK, and Malaysia.