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Published : 16 Apr 2025, 09:47 PM
The National Board of Revenue (NBR) has withdrawn the 5 percent advance tax on imports of unrefined soyabean and palm oil, just a day after cooking oil prices were hiked by Tk 14 per litre following traders’ demands.
The tax exemption was announced through a special order issued on Tuesday and made public on Wednesday.
The directive, signed by NBR’s First Secretary (VAT Policy) Md Moshiur Rahman, clarified that the exemption applies specifically to the import of crude soyabean and palm oil, which had previously been subjected to a 5 percent advance tax.
On Tuesday, the interim government set the new price of bottled soyabean oil at Tk 189 per litre while loose soyabean oil was priced at Tk 169 per litre.
The price of bottled soyabean was last revised on Dec 9, 2024, when it was set at Tk 175 per litre.
On Sunday, Bashir Uddin said: “We’ve revised the prices of soybean oil based on the international market and [Bangladesh Trade and Tariff Commission] formula.”
“According to the formula, each litre of [soyabean] oil costs Tk 197. But we set the price after discussing it with industry stakeholders.”
Citing the withdrawal of tax exemption benefits as the reason for the price hike, the advisor said, "The government exempted tax for cooking oil. This caused a Tk 5.5 billion drop in revenue collection per month."
“We have limitations in granting revenue exemptions to meet operating expenses of the government. A tax exemption of about Tk 20 billion was granted with Ramadan in mind. The tax exemption for soyabean oil has been withdrawn for now."
The government's decision to cut cooking oil excise duty before Ramadan to keep the prices affordable expired on Mar 31. Mill owners proposed raising prices before that, suggesting a Tk 18 hike for bottled and Tk 13 for loose soyabean oil.
Earlier, on Oct 17, 2024, the NBR exempted 15 percent VAT at the production stage and 5 percent at trading for both refined and unrefined soyabean and palm oil supply.
On Apr 1, the day after the VAT exemption expired, traders announced bringing the proposed price hike into effect.
Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association sent a letter to the commerce ministry and the tariff commission on Mar 27 informing them of the decision.
Discussions between the government and traders resumed after the Eid-ul-Fitr holidays, leading to Tuesday’s revised pricing that aligned closely with the traders’ proposals.
