NBR finds hardly any impact of duty cut on rice price

Revenue board getting Tk 135cr less a month for duty reduction

Staff Correspondent | Published: 22:41, Aug 12,2017

 
 

A file photo shows varieties of rice at a wholesale shop in Dhaka. The National Board of Revenue finds almost no impact of duty cut on rice import on the prices of the staple in the domestic market, officials said. — New Age photo

The National Board of Revenue finds almost no impact of duty cut on rice import on the prices of the staple in the domestic market, officials said.
They said that the prices of the item decreased only by Tk 2 a kilogram on average in last one and a half months though the revenue board lowered the import duty by 18 per cent.
The NBR is getting around Tk 135 crore less in revenue from rice import due to the reduction in the duty, but the consumers are not benefiting from the cut, they added.
The revenue board on June 21 cut the duty to 10 per cent from 28 per cent as rice prices was increasing excessively.
The food ministry has recently recommended that the finance ministry should further reduce the customs duty to stabilise rice prices in the domestic market.
As of June 21, the price of coarse varieties of rice rose by 46.88 per cent to Tk 46-48 a kg in the local market against Tk 30-34 a kg a year ago, according to state-owned Trading Corporation of Bangladesh.
The prices of fine and medium varieties of rice like Najir, Miniket and Paijam also increased by up to 20.65 per cent and were sold at the range of Tk 48-60 at that time.
Commerce minister Tofail Ahmed on June 21 told parliament that rice price would decline by at least Tk 6 a kg following the reduction in import duty as the import of rice would rise.
According to the TCB data, coarse rice was sold at Tk 43-45 a kg on Thursday.
Fine and medium varieties of rice were sold at prices ranging from Tk 48 to Tk 60 a kg on the day as the varieties experienced a rise in prices in last few days after a slight fall in July.
The market has not seen any significant drop in rice prices since the duty cut, said the revenue board.
Sourcing countries like India and Thailand also increased the export prices of rice after the NBR reduced the duty, it said.
According to the food ministry, both public and private sectors imported a total of 2.88 tonnes of rice between July 1 and August 8, which is almost double of the quantity imported in the entire fiscal year of 2015-2016.
Many importers have also refrained themselves from releasing their imported rice anticipating further reduction in the duty, a NBR official said.
In this situation, the revenue board has got stuck in a dilemma over reducing the duty again after observing the impact of the first-phase cut on the market, he said.
‘The NBR by itself may not reduce the duty, unless it gets instruction from the government high-ups,’ he said.
‘It [further reduction] will completely depend on the political decision of the government as soaring rice price is a major concern for the government,’ he said, adding that they were yet to get any instruction from the government on the issue though they heard that the food ministry made a request to the finance ministry in this regard.

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