After sugar, the government has also withdrawn Value added tax (VAT) on cooking oil and chickpeas to keep the kitchen market stable on the occasion of the upcoming Ramadan and keeping in mind the rising commodity prices.
In the case of soybean oil, 15% tax at the production level and 5% tax at the retail level have been withdrawn; the decision will remain in force till June 30.
As a result of this decision of the government, the price of cooking oil will come down by Tk25-30 per litre.
Biswajit Saha, director for corporate and regulatory affairs of City Group, one of the major importers of soybean oil, said: "At present, the maximum retail price of soybean oil in the market is Tk168, and if VAT is withdrawn at the rate announced by the government, I think the price can be reduced by about Tk30 per litre.”
Earlier on the day, Finance Minister AHM Mustafa Kamal announced the VAT withdrawal on sugar, edible oil and chickpeas while briefing reporters after two consecutive meetings of the cabinet committee on economic affairs and cabinet committee on public purchase.
The minister said VAT on the import of these commodities has been withdrawn as their consumption rises during the month of Ramadan.
“Considering the holy month Ramadan, we took the decision to withdraw the VAT for a temporary period.”
“The decision has been taken so that prices of the essentials can be kept at a tolerable level,” he said.
Kamal, however, did not give any details on exactly which products will be exempt from VAT.
The public relations officer of the Finance Ministry said that 15% tax at the production level and 5% tax at the retail level have been withdrawn from cooking oil.
Before that, the National Board of Revenue (NBR) has decided to extend the reduced tariff benefit for importing raw sugar for another two and a half months so that it can be purchased at a reasonable price during the upcoming month of Ramadan.
On March 6, according to a statutory regulatory order (SRO) from the Internal Resource Division of the Finance Ministry, this benefit will remain until May 15.
The move comes after the previous concessionary benefit for importing raw sugar with a 20% regulatory duty that expired on February 28.
On Thursday during the briefing, Mustafa Kamal also said that the government has taken initiative to provide commodities through the Trading Corporation of Bangladesh (TCB) to 10 million families across the country.
“We have taken the step so that people do not suffer,” he said, adding that measures have been taken to strengthen the TCB as it provides daily essentials to people.
He said that operations of the TCB are being extended to the union level so that people can get products easily.
Responding to a question, he said people are feeling the pinch of the price hike when local productions, as well as international supply, are being hampered.
Now, supply from the international market is being hampered due to the Russia-Ukraine war.
He said the war has pushed up the transportation cost and the suppliers are taking the advantage of the situation, further hiking the price of the products.
“If we deliver the commodities through the TCB to people, then everything will be fine. The TCB will play a more effective role in the coming days,” the finance minister further said.
On February 6, the Commerce Ministry decided to increase the price of oil by Tk8 per litre considering the concerns of traders. At that time the price of loose soybean was fixed at Tk143 per litre, bottled soybean at Tk168 per litre and bottled soybean at five-litre at Tk795.
The price of open palm oil was fixed at Tk133.
However, the government's announcement remained only on paper as the traders did not follow that decision and continued charging higher prices.
On Wednesday, loose soybean oil was barely available in Dhaka's kitchen markets and a litre of loose soybean oil was going for Tk175 per litre, 22% higher than the government's fixed rate of Tk143 and the five-litre containers were selling for Tk830, still 4.4% higher than the government fixed rate of Tk795.
