Bangladesh’s trade competitiveness is being undermined more by weak customs service delivery and inconsistent implementation than by high tariff rates, senior revenue and commerce officials said, acknowledging systemic failures that frustrate businesses and trade partners.
National Board of Revenue (NBR) Chairman Abdur Rahman Khan said service discrimination and inconsistent customs assessments were unacceptable, noting that complaints stem less from tax rates and more from inefficiencies in daily operations.
Khan made the remarks while speaking at a seminar titled “Customs protecting society through vigilance and commitment” at the NBR auditorium in Dhaka on Sunday.
Describing revenue collection as an “extremely difficult and unpopular” task, he said the NBR faces pressure from both the government and taxpayers, while Bangladesh continues to face annual revenue shortfalls that increase reliance on foreign borrowing.
He said compliant taxpayers often complain of being pressured to pay higher taxes even during periods of weak business profits.
Although Bangladesh’s tariff rates remain among the highest globally, Khan said dissatisfaction is driven mainly by weaknesses in service delivery, particularly in customs valuation and assessment practices.
“There should be no scope for different assessments or valuations for the same goods, from the same country, assessed by the same officer at the same customs house on the same day,” he said, adding that discrepancies would be monitored and addressed at the supervisory level.
Khan acknowledged that despite digitalisation efforts and a unified customs code aligned with global standards, gaps remain in analytical capacity and uniform service delivery.
He also expressed concern over the slow implementation of the Authorised Economic Operator programme, saying only 21 operators have been approved so far despite more than 80 pending applications.
Trade facilitation has become the central focus of customs, Khan said, noting that customs duties once accounted for about 90 per cent of total revenue in 1972 but now contribute only 22–23 per cent, with the rest coming mainly from VAT and income tax.
Ideally, customs duties should not exceed 1 per cent of gross domestic product, but protectionist policies have pushed the figure higher, he said.
On bonded facilities and the free-of-cost import regime, Khan warned that excessive import ease could weaken backward linkages, undermine domestic industrialisation and hurt job creation.
Calling misdeclaration a “huge problem,” he said declaring one product while importing another must be stopped, stressing that customs also plays a role in national security, social balance and protection from drugs.
Commerce Secretary Mohammad Mahbubur Rahman said trade partners are increasingly seeking process simplification rather than tariff reductions, as non-tariff barriers arising from complex customs procedures remain a major concern.
Referring to a recent meeting with the European Union ambassador, he said the EU submitted a list of concerns, around 15 of which directly relate to customs processes rather than laws.
Despite the introduction of the National Single Window and the AEO system, only nine firms currently hold AEO status, which he said does not reflect meaningful facilitation.
With Bangladesh preparing to graduate from least developed country status, Rahman said trade facilitation has become critical as the country negotiates trade agreements with Japan, South Korea, the European Union, Australia and Canada.
Zaidi Sattar, chairman of the Policy Research Institute, warned that without significant progress in customs modernisation, tariff rationalisation and trade facilitation within the next three to five years, Bangladesh risks falling behind competing economies.
