BSS-47 NBR for expanding bonded warehouse facility to non-RMG exporters

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ZCZC

BSS-47

NBR-BONDED WAREHOUSE

NBR for expanding bonded warehouse facility to non-RMG exporters

DHAKA, May 05, 2019 (BSS) – The National Board of Revenue (NBR) Chairman, Md Mosharraf Hussain Bhuiyan, today said that the board has started a thorough review of the existing bonded warehouse facility in a bid to expand it for the non-readymade garment exporters.

“Around 85 percent of the export is dependent on RMG export thanks to policy support of the government,” he said.

The NBR chairman said these at an orientation programme arranged for the members of the Economic Reporters Forum (ERF).

The programme, titled ‘Tariff modernisation and expansion of bonded warehouse facilitates to non-RMG’ exporters’, was organised by the ERF in collaboration with Bangladesh Investment Climate Fund II (BICF) of the International Finance Corporation (IFC).

NBR chairman inaugurated the programme on ERF office premises. Policy Research Institute (PRI) chairman Dr Zaidi Sattar, World Bank Group’s private sector specialist, Macro economics, trade and investment (MTI) global practice Nusrat Nahid Babi and Mashiur Rahman, joint commissioner of Customs Bond Commissionarate, NBR, among others, spoke on the occasion.

The NBR chairman said now time has come to diversify export-basket and expand the duty-free facility to other export-oriented sector.

He said leather and jute exporters are in the priority list for expansion of bonded warehouse facility.

Mosharraf urged the newsmen to unmask the abusers of the duty-free benefit under bonded warehouse facility.

He said local industries are bearing the brunt as duty-free products are flooded in the market due to abuse of the facility by vested quarters.

Responding to a query, he said punitive measures has been taken against some 30 companies in Dhaka and 29 companies in Chattogram in recent months for abuse of the bonded warehouse facility.

“Those companies failed to show export using those duty-free items. Bond license of the companies might be canceled,” he said.

Dr Sattar said high protective duty is working as ‘anti-export bias’ as industries are focusing on domestic-market rather than export.

“Economic growth is not possible on the basis of only domestic market expansion. Employment would not be generated if export market is not expanded,” he added.

Domestic market is 0.5 percent, or $300 billion, of the $75 trillion international market, he added.

He said high protective tariff, average nominal 26.6 percent, is also responsible for price hike of the consumer goods.

Many of the consumer goods in Bangladesh are pricier than that of other countries, he added.

“RMG sector occupies $32 billion of the total export earning $37 billion. Export diversification is not satisfactory due to unfriendly tariff regime,” he said.

Dr Zaidi also said tariff escalation ratio is highest in Bangladesh, 3.5 percent, compared to other countries.

Babi presented a paper on ‘Leveling the playing field for export diversification: bonded warehouse reforms for easier access to inputs’.

She said the country could have increased its export earnings by $4.2 billion to $ 8.4 billion in 2013 to 2017 period if it could expand the bonded warehouse facility to non-RMG exporters.

“Higher incentives for the domestic market are discouraging export,” she added.

Rahman said the industry will consider its comparative advantage in businesses.

“If there is any vacuum in the domestic market, industry will concentrate on it,” he added.

ERF General Secretary SM Rashidul islam delivered the welcome remarks while Vice President Shahnewaz Karim delivered vote of thanks.

BSS/ASG/RI/GM/KU/2019 HRS