Cosmetics importers on Wednesday suggested reforms in the taxation structure that they feel were encouraging product adulteration locally.
They cited the minimum value provision of the authorities to levy VAT and taxes on imported beauty products as the key reason for corruption in the sector.
Minimum value is a threshold that the customs determine through issuing a statutory regulatory order (SRO) for the assessment purpose.
The observations were made at a view-exchange meeting with cosmetic importers, marketers and traders organized by the Directorate of National Consumer Rights Protection (DNCRP) in its conference room in Dhaka.
DNCRP head AHM Shafiquzzaman said the directorate during its drives found anomalies and fraudulence in the marketing of foreign cosmetics while setting maximum retail price and adulteration of products which might even cause cancer.
“Face and body-whitening creams are marketed without authentic approval, thereby dodging VAT and taxes by a quarter (known as 'luggage party') who are not authorized to import them,” he added.
Azmol Hossain Bablu, chairman of Naba Distribution Ltd, a leading cosmetic importer, said without a change in the duty structure, it will be hard to eradicate adulteration from the sector.
He suggested that the minimum value provision, used by customs to levy VAT and taxes, be removed first to fight corruption in the sector.
Bablu urged the government to consider the transaction value for customs assessment following global practices instead of “minimum value”.
Sharif Mohammad Ali, executive director of Remark HB Ltd, said it costs him Tk599 to import a foreign-branded lipstick which he found online for Tk40.
“How could a company afford to price this at Tk40 without it being fake?” he asked.
Swapno supply chain head Tamal Paul said super shops in Bangladesh could hardly compete in the market as 19.5% VAT and taxes are imposed on products retailed at the chains.
Meena Bazar senior executive Soumitra Kumar Roy said many of his customers looked for foreign cosmetics which "we cannot supply as they are not available through proper channels.”
"But people are able to find ‘alternative’ ways to procure them, making us lose customers in the process,” he added.
Consumers Association of Bangladesh (CAB) representative Abdul Hannan, DNCRP director Manzur Mohammad Shahriar and deputy director Atia Sultana, among others, also spoke.
Ten big entities have recently been fined Tk8 lakh by the directorate in this connection.
Banani-based Color Me, Seoul Mart, Sundora, Bodiline, Banani-Gulshan-based Astorion, Moulovibazar-based Chittagong Store, Mohammadpur-based Infinity, AR Enterprise at Karwanbazar, Fazlu Corporation at Chawkbazar and Anna Plaza at Gulshan DNCC Market were fined in different cases in recent weeks.
