NBR makes imported sugar costlier to help state mills
The National Board of Revenue has imposed 15 percent value-added tax on the imports of raw and refined sugar and increased the import value of the sweetener, to protect state mills and spur sales of the local variety.
Sugar prices started rising early this month amid speculation, before the twin decisions were announced.
Since the beginning of December, retail prices rose 11 percent to Tk 44-Tk 46 a kilogram from Tk 39-Tk 42 at the end of November, according to Trading Corporation of Bangladesh.
Industry operators predicted that consumers may have to pay much more to buy sugar in the days ahead.
"The cost of imports has gone up due to the latest measure by NBR," said Bishwajit Saha, general manager of City Group of Industries that runs the biggest sugar refinery.
The retail prices of sugar may rise to Tk 51-Tk 52 a kilogram in Dhaka markets, according to Saha.
The NBR also raised the import price of raw sugar by $30 or 9 percent to $350 a tonne. The tariff value of imported refined sugar has also been increased by $30 or 7.5 percent to $430 a tonne.
The latest measures came nearly four months after the NBR slapped a 20 percent regulatory duty on imported raw and refined sugar, in a bid to make locally produced sugar competitive and to facilitate the public sugar mills to clear stocks.
Bangladesh Sugar and Food Industries Corporation (BSFIC), which runs 15 state sugar mills, had long been seeking duty protection to trim losses and clear stockpiles.
Saha said the import cost of raw sugar would rise by Tk 6 a kilogram due to the NBR move.
The duty spike comes at a time when sugar prices started regaining in the world market.
The price of sugar globally rose to $0.32 a kilogram in November, according to the World Bank Commodities Price Data. It was $0.26 a kilogram in September
this year.
Bangladesh, which meets a bulk of its domestic demand through imported raw sugar, purchased 19.5 lakh tonnes of raw sugar from abroad in fiscal 2014-15, up from 19.4 lakh tonnes a year ago, according to data compiled by BSFIC.
Locally produced sugar meets less than 10 percent of the annual requirement, according to industry operators.
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