National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan has warned that many businesses are misusing duty benefits, posing a challenge to the revenue system.
He said goods imported with tax benefits for commercial purposes are in many cases being used in households, which has become a major concern.
He made the remarks at a pre-budget discussion held at the NBR conference room in Agargaon on Tuesday, attended by senior NBR officials and representatives of various business organisations.
The NBR chairman said, “Many have assumed that it is not possible to do business honestly. This mindset needs to change.”
He cautioned that excessive segmentation in HS codes and varying duty rates increase the scope for misuse, adding that keeping rates more uniform can reduce such practices.
He also said, “It is often seen that goods imported for commercial purposes at lower duty are later used in households. This has become difficult to control.”
At the discussion, Bangladesh Electrical Association representative and AH Electric Company Proprietor Hares Mohammad said applying the same HS code to household switch-sockets and industrial products like limit switches or selector switches is not practical.
He said mis-declaration has become a major issue.
“Five years ago, penalties for mis-declaration ranged from 200 to 400 per cent, but these are not being effectively enforced now,” he said.
According to Hares Mohammad, controlling mis-declaration could increase revenue collection at the import stage by up to 50 per cent.
He added that importers alone are not responsible for the issue, as other stakeholders are also involved.
Several proposals were raised during the pre-budget discussion.
The Bangladesh Electrical Merchandise Manufacturers Association proposed withdrawing regulatory duty on raw materials used in electrical equipment manufacturing.
The Bangladesh Manufacturers Association of Transformers and Switchgears recommended reducing duties on raw materials.
The Bangladesh Sustainable and Renewable Energy Association proposed rationalising customs duties, reforming valuation methods and offering tax holidays to support expansion of the renewable energy sector.
Meanwhile, the Bangladesh Aluminium Manufacturers Association called for VAT exemption on aluminium products.
The Accumulator Battery Manufacturers and Exporters Association of Bangladesh proposed reducing VAT on finished batteries from 10 per cent to 5 per cent.
The Bangladesh Semiconductor Industry Association sought long-term tax holidays.
The Bangladesh Bread, Biscuit and Confectionery Manufacturers Association called for including handmade biscuits and cakes in the VAT exemption list under Section 26 of the VAT Act 2012.
