A circular was issued in this regard on Wednesday
The government has almost doubled import duties on rice to 55%, in a bid to bring slight relief to farmers hit hard by lower prices of paddy.
Earlier, import duties totaled 28%.
According to a statutory regulatory order (SRO) issued by the National Board of Revenue (NBR) on Wednesday, the new import duties will be effective immediately.
“We revised the import duties as per the instructions of Prime Minister Sheikh Hasina, to save farmers from incurring financial losses,” NBR Chairman Md Mosharraf Hossain Bhuiyan said.
He added that 303,000 tons of rice were imported in the first 10 months of the current fiscal year (FY2018-19), which had a negative effect on the sales of paddy grown by local farmers.
“Farmers even had to sell rice at prices so low that they failed to meet production costs,” the NBR chairman said.
According to the SRO, rice importers now have to pay 25% regulatory duty, as compared to the previous 3%. Furthermore, the NBR imposed 5% advance income tax (AIT) on rice imports for the first time ever.
On the other hand, the customs duty has remained unchanged at 25%.
NBR member Md Firoz Shah Alam said the government has been gradually increasing import duties on rice over the last few years to discourage imports.
The import duty on rice was 25% in FY2017-18, and was raised by 3% to 28% in the budget for FY2018-19. Import duties have now been raised further to 55% to help farmers, Alam added.
Earlier on Monday, the Parliamentary Standing Committee on the Food Ministry recommended stopping rice imports and taking plans for exports.
Experts believe the government initiative to increase import duties will benefit farmers in the long run.
Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem said the decision to control rice imports should have been taken long ago.
“The government has acted too late,” he said, adding that the late decision had caused suffering for farmers as rice prices were reduced by the supply of rice from imports.
He also said the increase in import duties should not increase the price of rice in the market, as there are adequate stocks.
Moazzem suggested that the government should procure more rice from farmers immediately, to ensure fair prices, and that exports be allowed in limited numbers.
The government earlier promoted rice imports in the last two years ago, lowering import duties to 10% to meet a rice supply shortage caused by floods in 2017.
The government had said they required 1,000,000 tons of rice to meet the shortage, but a total 6,000,000 tons were imported in the last two years, said the Food Ministry.
There has been substantial growth in rice production over the last few harvest seasons, and rice stocks have risen significantly. The high supply forced farmers to lower prices to the point at which they could not meet production costs.
Paddy was found to be selling at Tk450 to Tk500 for every maund (1 maund=40kg) in the last few days, but growers said the cost of harvesting each maund of paddy was between Tk1,000 to Tk1,500. Farmers across the country have launched protests over the issue.