Duty slashed for imports from OIC, D-8 countries
The duty reductions will have insignificant impact on revenue collection, but the country’s export will be benefited greatly
The authorities have reduced duty to 10% for imports from Organisation of Islamic Cooperation (OIC), and D-8 Organization for Economic Cooperation (D-8) countries under two separate trade agreements.
Officials said the duty reductions will have an insignificant impact on revenue collection, but the country's export will benefit substantially from it.
A statutory regulatory order by the Finance Ministry on 20 July mentioned a duty cut for import of 478 types of products from the OIC countries.
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But such imports have already been enjoying the reduced rate, as the new notification will be applicable for only 47 items with customs duty ranging from 15%-25%.
On 20 July, another separate statutory regulatory order was issued reducing import duty of 356 products from the D-8 countries. However, no new products will be subject to tariff reduction as these products already have lower import duty.
According to customs sources, Bangladesh cut the import duty of 478 products to 10% according to the 2003 OIC tariff base line under the Trade Preferential System among the Member States.
At that time, almost all of those products had duties above 10%. However, those rates fell over the years, as import duty of only 47 products remained 15%-25%.
"We will have to exempt around Tk6.5 lakh in duty for import from the OIC countries as per FY2021-22 estimate. This is insignificant compared to the overall benefits the country will get in export," a top customs officer at the revenue board told The Business Standard.
According to sources, import duty has already been reduced under the 2013 Preferential Trade Agreement Among D-8 Member States. Currently, the customs duty on the products is 10% or less.
As a result, even if the duty is reduced on paper, there will be no need for further duty adjustment, and there will be no negative impact on the revenue.
Apart from Bangladesh, other countries belonging to D-8 are Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.
According to customs sources, Egypt and Pakistan have not implemented the import tariff yet.
