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Bangladesh raises import duties on fruits, cutting imports by 30% amid rising inflation

In a recent move by the National Board of Revenue (NBR) on January 9, Bangladesh saw a rise in supplementary duty on the import of selected dry and fresh fruits, including nuts and betel nuts, now taxed at 45 percent up from 30 percent. Additionally, the duty on certain fresh fruits such as grapes, apples, and watermelons, alongside juices, escalated to 30 percent from the previous 20 percent. This adjustment mid-fiscal year is part of the government's strategy to boost revenue and align with the International Monetary Fund's (IMF) conditions under its $4.7 billion loan program for Bangladesh.

The decision has drawn criticism from economists and businesses, pointing to the timing amidst an inflation rate exceeding 9 percent over nearly two years. Retail prices for various fruits have surged, leading to a decrease in consumer purchases. Notably, prices for apples, oranges, and grapes have risen, significantly impacting consumer buying power and habits.

Traders have reported a substantial decline in imports and wholesale sales following the duty adjustments, with imports dropping by approximately 30 percent and wholesale sales by 20 to 25 percent. The Bangladesh Fresh Fruits Importers Association has reached out to the government, seeking relief from regulatory duties and a reduction in advance income tax, especially with the approach of Ramadan, a period of heightened fruit consumption.

Despite these appeals, the supplementary duty hikes have been implemented, contributing to a decrease in fruit imports as evidenced by the opening of letters of credit (LCs), which fell by 8.5 percent year-on-year to $107 million in the July-November period of the 2024-25 fiscal year. The Consumers Association of Bangladesh has urged the government to postpone these duty increases until after Ramadan to alleviate the financial burden on low- and middle-income families.

Source: Asia News Network

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