Reduced import duty planned for steel raw materials, dialysis items

Illustration: TBS

The government plans to reduce duties on the import of raw materials for the steel, beverage, healthcare, and personal care industries, as well as equipment for healthcare services in the upcoming budget, aiming to provide relief for manufacturers and consumers.

As part of the plan, the regulatory duty on the import of ferro alloys, which are used in the production of steel, is likely to be reduced to 5% for FY25 from the current rate of 15%, finance ministry officials told The Business Standard.

Additionally, there are plans to reduce the customs duty for the import of Tetra Pak (Aseptic Pak), a sustainable packaging material for milk, juice, and other drinks, to 0% from the current rate of 25%.

Ministry officials also mentioned that the upcoming national budget is likely to propose reducing customs duty to 1% from 10% for dialysis filters and dialysis circuits to make dialysis services and treatment more affordable.

The government is also planning to reduce the customs duty on isopropyl myristate, a moisturiser used in the cosmetics industry, to 10% from the current rate of 25%.

Insiders from these sectors welcomed the move, stating that it will benefit the industries, allowing them to stay competitive and offer attractive prices to customers.

A welcome move for steel industry

Ferro alloys refer to various alloys of iron with a high proportion of one or more other elements such as manganese, aluminium, or silicon.

Industry insiders say the country needs about 2.4 lakh tonnes of ferroalloys – including ferro silicon, ferro manganese, and silico manganese – to produce about 1 crore tonnes of steel annually.

However, only Rahim Steel has the capacity to produce ferro alloys, which is not enough to meet the country's demand.

Finance ministry officials say the government made the decision of reducing regulatory duty on ferro alloys considering the industry's situation.

Aameir Alihussain, managing director of BSRM Limited, said, "A reduction in import duty on ferro alloys by the NBR would aid in lowering production costs, considering we are one of the top importers of this item."

Shahrier Jahan, deputy managing director of KSRM Group, said the move will be helpful for the steel industry.

However, he expressed concern over the base prices of raw material imports during duty calculation. In some cases, officials value them at about 77% more than the import value, he said.

He further said they import ferro manganese per tonne at $1,300; however, customs officials valued it at $2,300. Similarly, silico manganese has been assessed per tonne at the fixed price of $1,160, although the import price is $800.

On the other hand, ferro silicon is imported at $1,200 per tonne, but customs assessment value is fixed at $2,000.

Steel industry manufacturers urged the National Board of Revenue (NBR) to follow the rule of taking the average price of the last three months during assessment.

Good news for beverage manufacturers

The finance ministry officials said the Tetra Pak raw materials include 70% paper, 25% plastic, and 5% aluminium, making it more environmentally friendly than other packaging materials.

Representatives from the beverage sector have embraced the news of a reduction in customs duty on Tetra Pak.

Kamruzzaman Kamal, marketing director of PRAN-RFL Group, which has the lion's share of juice exports from Bangladesh, said it would be good news for the industry if the government reduces the customs duty for Tetra Pak.

He said this packaging material is more environmentally friendly as it can be easily recycled.

"The initiative will make us competitive in the export market," he added.

Relief for kidney patients

Harun Ur Rashid, president of the Kidney Foundation of Bangladesh, said if the government reduces customs duty on the import of dialysis filters and dialysis circuits, it will be good news for kidney patients.

He mentioned that about 18,000 patients require dialysis every day, and the Kidney Foundation provides this service to around 1,000 patients daily.

Welcoming the initiative, AM Shamim, managing director of Labaid Hospital, suggested that the government should also reduce VAT and taxes on medical equipment.

A boost for cosmetics industry

According to finance ministry officials, the Bangladesh Export Zone Authority (BEZA) recommended reducing the customs duty on the import of isopropyl myristate.

Asraful Ambia, president of the Association of Skincare and Beauty Products Manufacturers and Exporters of Bangladesh, stated that this raw material is an important component of the cosmetics and skincare industry.

"We believe that if the government provides such budgetary support, it will be helpful for the local cosmetics industry to boost its market share," he added.

He is also optimistic about creating more employment opportunities through investments in the local cosmetic industry.