Imported fruits source tax slashed by 5pc

Importers have been paying taxes amounting to 136 percent on imported fruits

The National Board of Revenue, or NBR, has reduced source tax on the import of different “fresh and dried” fruits, including grapes, pears, tangerines, and oranges, from 10 percent to 5 percent.

On Thursday, the NBR issued a notice on the tax cut with immediate effect.

The list of fruits includes fresh or dried oranges, citrus fruits, grapes, apples, and pears.

These fruits were previously included in the list of over 100 goods and services on which customs duties and the value-added tax, or VAT, were raised on Jan 9.

The supplementary duty on imported fruits was increased to 30 percent, up from 20 percent.

The regulatory tax on roughly 135 items was increased from zero and three percent to 20 percent in May 2022, to contribute to the post-COVID economic recovery and ease the pressure on foreign reserves. Imported fruits accounted for a significant portion of that list.

In May 2022, the regulatory duties on 135 products were shot up at once from 0 and 3 percent to 20 percent.

As a result, the prices of imported fruits have remained high for the past few years.

Prices for these fruits have soared again at the start of Ramadan as buyers shell out Tk 25 to Tk 50 per kg.

Apples are now priced at Tk 320 to 420 per kg, oranges Tk 280 to 300, tangerines Tk 300 to 340, and grapes Tk 300 to 330 in the market of the capital.

Currently, these fruits are subject to 25 percent import duty, 20 percent regulatory duty, 30 percent supplementary duty, 15 percent VAT, 5 percent advance income tax, and 5 percent source tax.

Virtually every type of duty and tax has been imposed on imported fruits. In total, the duty and tax burden has been 136 percent so far, so importers have been paying Tk 136 in taxes for fruits worth Tk 100.