Muhith backtracks on commodity import tax
Finance Minister AMA Muhith has reversed a decision to impose “tax at source” on certain essential imported commodities such as wheat, cooking oil and sugar in the upcoming fiscal year.
He said it was a mistake to propose the imposition of 2 percent tax at the import stage of the commodities.
“Such mistakes create problems and instability in the market. Let me correct it. There will be no source tax on those imported products,” Muhith said in parliament on June 15.
Crude and refined petroleum, petroleum products, lubricant, leather, MS rod and steel, and mobile phones were some of the items due to be brought under the tax net from fiscal 2015-16.
Until now, the items were exempted from source tax, but Muhith proposed for their inclusion to boost collections so that fiscal 2015-16's high revenue target of Tk 176,370 crore can be met.
“We hope to collect an additional Tk 1,200 crore through other means,” said a senior official of National Board of Revenue.
The official said they are yet to get any instruction from the minister regarding the items that would be taken away from the source tax list.
Muhith's latest shift comes a week after he had corrected another wrong decision of imposing duty on sugar imports.
In his budget speech, Muhith proposed to increase the import duty on raw sugar from Tk 2,000 to Tk 4,000 and on refined sugar to Tk 8,000 from Tk 4,500 per tonne.
Later, Muhith backtracked on the decision as the country heavily relies on imports due to scanty local production.
“We considered various proposals but did not change it, so the previous rate will remain unchanged,” the finance minister said in parliament referring to sugar.