Panel suggests reducing Bangladesh import tariff to WTO rates
ISLAM SYFUL |
01, 2021, 10:02 a.m.
01, 2021, 10:18:36
Adjusting Bangladesh’s tariff rates to levels set by the WTO is suggested by an official panel before the country switches to a developing country which will subject it to a competitive trade regime.
Officials said the suggestion came from a task force that is part of a subcommittee on internal resource mobilization and tariff rationalization, formed by the prime minister’s office doing work of fund for the change of status of the country.
The subcommittee is charged with recommending ways to successfully address the challenges that may arise from the reclassification of LDCs.
“We need to look at the effective tariff rates so that they don’t exceed the WTO bound rates for the country,” says Syed Golam Kibria, member of the national revenue council, who heads the study group on tariff rationalization .
Mr Kibria, at a recent subcommittee meeting, further felt that para-tariffs should also be considered as they may be considered by the World Trade Organization (WTO) in the future.
In addition, in some cases, the existing minimum value as a benchmark for duty assessment is not in line with international practice and the protection afforded to local industry must be time-limited and performance-based.
For effective preparation adapted to the post-graduation era, the committee recommends that the facilities offered to the clothing sector be offered to other sectors as well.
And it is imperative to consider how import duties can be gradually lowered.
Currently, the simple average MFN (most favored nation) tariff rate in Bangladesh is 14 percent, which in the case of agricultural products averages 7.5 percent and 13.4 percent. percent for non-agricultural products.
Officials said the high tariffs are a major obstacle to Bangladesh signing trade deals such as a Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA), although entering into such pacts has become imperative for the country before the reclassification of LDCs.
An official from the Ministry of Commerce, citing an example, said Bangladesh must lower average tariffs from 1.0% to 2.0% if it wants to sign an FTA with ASEAN states.
He said Bangladesh is currently in talks with various countries to conclude FTAs or PTAs, which may not be possible if effective tariffs are not reduced.
“After the withdrawal of LDCs, Bangladesh will lose many advantages and tariff rationalization will become a big challenge,” the official said.
At the subcommittee meeting, Commerce Secretary Tapan Kanti Ghosh said the country’s export sector would suffer from the exit of the LDC (Least Developed Countries) group in 2026, as the preferential treatment granted to products is destined to disappear thereafter.
“In addition, tax revenues will decrease due to tariff rationalization,” he said, adding that it is also necessary to keep in mind the continued protection of local industry.
To compensate for the loss of income, he calls for the extension of value added tax and other direct taxes.
Mr Ghosh said a special bonded warehouse facility should be provided to other export-oriented sectors to create a level playing field on a level playing field with clothing in the export trade. .