Review Decision On Tariff And Vandalism

Review the decision on tariff and criminal act, For more revenue and justice perfect.

Three weeks ago government lowered the prices of sugar and edible oil. Yet the two items are still being sold at higher prices. In general, 52% taxes( 30% duty,15% VAT and 7% advanced tax) were imposed on sugar before the new directive took effect. On the other hand, 15% VAT along with other duties were imposed on edible oil. Govt halved the import duty on sugar and halved the VAT on edible oil. Along with onion, import duty on edible oil and sugar constitutes a great part of import revenue. Slashing the duties will evidently lower the revenue generated from these two kitchen commodities.

In 2023, govt's sugar import stood at Tk 12710 crore. Every year govt imports Tk 25000 crore worth of edible oil. Now with the former duty structure, sugar alone generated Tk 6609.2 crore and edible oil Tk 3750 crore as import revenue. With the new tariff structure, revenue loss from sugar and edible oil will become Tk 1906.5 crore and Tk 1250 crore respectively. The decision would cost the govt altogether Tk 3156.5 crore in this time of austerity^1&2.

As understood from desperation of tackling the inflation,the measures are pretty much in line with govt's top priority. At this time of slow business activity, revenue generation will be lower. This year govt faces an uphill task of meeting revenue target of Tk 5.41 trillion. Last year, revenue shortfall was Tk 381.57 billion against the target of Tk 4.1 trillion. The slow pace of revenue generation ( caused by political uncertainty, lack of capacity and slow business activity) is likely to hamper meeting the target. We have to wait for 1 or 2 months to see whether the tariff reduction has any impact on inflation.

My personal opinion is to review the decision immediately. Because sugar and to some extent edible oil get less priority in the list of essential kitchen items. So govt could easily retain Tk 3165.5 crore by reinstating the tariff structure. I am optimistic after the November 5 election things will improve dramatically including inflation.

Apart from fixing the revenue generation, addressing political uncertainty calls for objective stance on vandalism. Vandalism does not have different meanings for different people. It will be biased move for the govt to call one unlawful act vandalism while sparing the other one. Attacks on key public installation, foreign cultural institute, museum, police station, houses of former ruling party members should be treated as acts of vandalism and law should take its own course. Otherwise, biased justice will open another chapter of political agitation. In Sri Lanka, interim govt tried the attackers of presidential palace and the court sentenced them for their conduct. To gain the confidence of people from all walks of life, interim govt should do the same and immediately bring to book all the troublemakers, plunderers and arsonists. It is indeed a good news that United Nations Commission for Human Rights opened an office in Bangladesh. An independent forensic lab under the UN could help the probe on the atrocities committed during July and August. Reviewing the decisions taken so far could improve our revenue generation and help the govt gaining more confidence.

References:

1. "Chinir Shulko 30% Theke Kome 15% Kora Hoechhey:NBR(Tariff On Sugar Lowered To 15% From 30%:NBR)",Daily Prothom Alo,October 09,2024.
2. "Soyabin O Pam Tele Vat Chhar Diyecchey Sarker(Govt Slashed VAT On Soybean And Palm Oil)",Daily Prothom Alo,October 17,2024.