The National Board of Revenue is yet to implement customs valuation (determination of the value of imported goods) rules although those were formulated 20 years ago in a bid to help the country conform to international practices and curb illicit transactions in export and import.

Experts familiar with the matter said Bangladesh is yet to lay the groundwork for the rules and lacks adequate infrastructure and manpower to detect misdeclaration or other malpractices, for which the rules have not taken effect despite several attempts.

As per the General Agreement on Tariffs and Trade (GATT) of the World Trade Organisation and the Customs Act-1969, the revenue authority of Bangladesh issued the rules in 2000 to determine the arm's length pricing of any transactions instead of using discretionary practices of determining prices.

Bangladesh being a member of the World Customs Organisation (WCO) also faces increasing international pressure to implement the rules.

All customs stations of Bangladesh follow transaction value, tariff value and minimum value methods for customs valuation but experts say the latter two methods contradict the rules.

According to the transaction value method, the customs authority will collect revenue as per the products' prices mentioned in import documents.

The other two methods determine the minimum value of more than 700 imported goods, including cars, cosmetics, body spray, chocolate, lotion, coffee, food items and vehicle parts, by several special orders from NBR.

This means there is no scope for collecting duty less than the prices fixed by the NBR. Customs officials and importers said if prices of these goods drop in the international market, importers have to pay duty at the fixed price.

In many cases, if the prices of the products increase in the international market, some unscrupulous importers do not mention it in the import documents to evade tax.

"We have instructed all customs houses on several occasions to implement the rules," said Golam Kibria, member (tariff policy and ICT) of NBR.

If there is any doubt about the transaction value, then there are five more alternative methods for taxation.

"I do not know why the law is not yet fully implemented," he added.

Customs officials think that if the rules are implemented without eliminating the limitations, imported goods would take more time to be released, leading to congestion at all customs stations and price spiral of the products.

For the last time on 30 July 2018, NBR asked all the customs stations to implement the rules simultaneously from 1 September through a "permanent order" but to no avail.

According to the Customs Valuation Rules-2000, the valuation has to be done considering the actual cost (invoice value) of products, which is called the transaction value method.

If the price is not determined in this process or if the declaration of the importer is not credible, it was suggested to consider five other methods.

These methods are: the value of identical goods (same importer, exporter and goods); the value of similar goods (similar goods by different companies); deductive value (analyses of the local market price); computed values (physical evaluation of the company of the exporting country), and fall back method (valuation of the database of a recognised website).

This correspondent spoke to the heads of the country's three customs houses to find out why the rules have not been implemented yet.

On condition of anonymity, they said since the rules were not implemented for a long time, a negative perception persists among all stakeholders.

The customs houses do not have adequate manpower or infrastructure to verify the authenticity of all import and export documents, they said.

Some dishonest importers show lower prices of goods in invoices for evading tax, and if the rules are implemented, the importers will not be able to dodge taxes, which is why the traders are against these regulations, they added.

"The rules will be relevant to our country only when we can stop illegal transaction or misdeclaration," said an official of Custom House, Chattogram, asking not to be named.

Bangladesh should take some initiatives to verify the authenticity of the invoices of the exporters with the help of its missions abroad, he added.

Tariff value and minimum value methods contradict the Customs Valuation Rules-2000, Customs Act-1969 and WCO rules, said Mahbubul Alam, president of Chittagong Chamber of Commerce and Industry.

"NBR is not interested in scrapping these two methods for its own limitations."

The goods should be taxed at the price at which the traders buy those, he said.

"It is not difficult to verify if a trader gives wrong information in the import documents."