The government now decides to lower value-added tax (VAT) on edible oils at import stage as part of market intervention to tame soaring prices of the essential item.
Presently, there is 15-per cent VAT on edible-oil imports which will go down to 5.0 per cent after the National Board of Revenue issues a statutory regulatory order (SRO) to this effect "soon", says a finance ministry official.
"The pared-down VAT rate will remain effective until June 30," he adds.
Earlier on Monday, the NBR issued a notification waiving 15-per cent VAT in manufacturing and 5.0 per cent in trading stages of edible oils.
The waiver came following instructions of government high-ups because of steep price hike of cooking oils during the last couple of months.
Businesses say Monday's SRO cast little impact regarding price reduction at consumer end. After the order was issued the ministry of commerce again wrote to the NBR and requested withdrawing the VAT in all stages of edible oils.
Also in the letter the ministry reminded the NBR that a high-level meeting at cabinet division on March 13, chaired by the home minister, had decided to lift all types of VAT on edible oils to lower the prices.
Biswajit Saha, General Manager of City Group, told the FE Monday that the prices of edible oils could come down by Tk 2.0 to Tk 3.0 per liter due to withdrawal of VAT and advance tax at manufacturing and trading stages.
He said it would be helpful to consumers if the NBR considered lowering VAT at import stage, too.
syful-islam@outlook.com