During a meeting with the Chief Adviser, a delegation consisting of industry representatives demanded slash in taxes on raw materials and intermediate inputs to uphold industrial growth. Heavy tariffs result in prices of imported inputs exceeding global rates, thus increasing production costs.
System of bonded warehouses was implemented to keep the RMG sector aloof from import tariffs, as this system allows duty-free import of inputs required for garment exports.
But local garment sector has to incur tariff inclusive costs of input imports. High tariffs are applied on consumer products made in Bangladesh to safeguard the sector from foreign competition.
In order to improve the country's economy, Government must depend less on revenue from import taxes and concentrate on relying upon domestic taxes like corporate and income tax.
Average protective tariff in Bangladesh stands at 24 percent, highest amongst South Asian nations. Slicing of levies on raw materials and intermediates could enable lowering of average tariffs, but it will not affect tariffs on the final product.
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