Government withdraws VAT on cooking oil import, other essential commodities

Value added tax (VAT) on the import of commodities such as sugar, chickpea, and cooking oil has been withdrawn, Finance Minister AHM Mustafa Kamal said on Thursday.

He announced this while briefing reporters after two consecutive meetings of the Cabinet Committee on Economic Affairs and Cabinet Committee on Public Purchase.

The minister said VAT on the import of these commodities has been withdrawn as their consumption rises during the month of Ramadan. 

“Considering the Holy Ramadan, we took the decision to withdraw the VAT for a temporary period,” he said. “The decision has been taken so that prices of the essentials can be kept at a tolerable level.” 

Kamal, however, did not give any details on exactly which products will be exempt from VAT.

The public relations officer of the Finance Ministry said that 15% tax at production level and 5% tax at retail level have been withdrawn from cooking oil. 

Mustafa Kamal, during the briefing, also said that the government has taken initiative to provide commodities through the Trading Corporation of Bangladesh (TCB) to 10 million families across the country.

“We have taken the step so that people do not suffer,” he said, adding that measures have been taken to strengthen the TCB as it provides daily essentials to people. 

He said that operations of the TCB are being extended to the union level so that people can get products easily.

Responding to a question, he said people are feeling the pinch of price hike when local production as well as international supply are being hampered. Now, supply from the international market is being hampered due to the Russia-Ukraine war.

He said the war has pushed up the transportation cost and the suppliers are taking the advantage of the situation, further hiking the price of the products.

“If we deliver the commodities through the TCB to people, then it everything will be fine. The TCB will play a more effective role in the coming days,” the finance minister further said.