There has been a bitter-sweet relationship between the customs officials and the export-import traders.
The officials alleged that the traders resort to unfair means to evade duty and raise various complaints after being held by the customs authorities. In contrast, the traders claimed the customs officers always seek bribes and harass those who do not fulfill their demands.
In a report on 28 May, Prothom Alo revealed astounding information regarding export-import trade. An export-oriented garment factory, located on the outskirts of the capital city, had opened a letter of credit (LC) to import 90,000 kg of clothes from China in three shipments through the Chattogram port.
Some 22,000 kg of clothes were supposed to be shipped in the final consignment, but the customs authorities found 1,700 kg in extra. It prompted them to seize the entire consignment on allegation of false declaration, fine the factory Tk 1500,000 in total, and impose an additional duty of Tk 450,000 for the extra clothes.
The delay in clearance of the shipment resulted in port charges amounting to Tk 1500,000, beyond the customs fines and duties. It took more than two months to complete the clearance process and the factory missed their shipping deadlines in the aftermath. They had to sell the pre-ordered garment products to the foreign buyers at a 50 per cent discount.
The business leaders raised the issue during a recent meeting with the prime minister at the Ganabhaban. They alleged that the customs officials prioritise fine collection over taxes as they receive a portion of the fines. The traders mostly pay bribes to the officials to avoid fines.
Fine collection is not an irrational system to contain tax evasion. When the customs officials receive a salary for doing their jobs, why would they receive a portion of the fine? Since time is a crucial factor in export-import trade, traders must maintain the deadlines of shipping and unloading, even if it requires bribes.
At the same time, we should keep it in mind that it takes two to make a quarrel. There are some traders who spend Tk 50 in bribes to evade Tk 100 in duty. He doesn't care if his action is causing losses to the nation.
Here comes a pertinent question – why hasn’t the clearance process been automated? The authorities would have adopted the automation system much earlier had they been completely honest in their intentions.
The BGMEA president alleged that its member factories had to count fines ranging from Tk 100,000 to Tk 10 million for minor discrepancies. He claimed the customs officials are harassing the businesses using the legal provisions and are slapping massive fines for insignificant discrepancies in HS codes, such as spelling flaws, or minor mismatch in weights.
In its business environment survey for 2023, which was released in January this year, the Centre for Policy Dialogue (CPD) described corruption as the number-one barrier for businesses in Bangladesh. Meanwhile, the latest business climate index noted that the business climate in Bangladesh deteriorated further.
To improve the business environment, the traders must comply with the law and the customs authorities refrain from undue harassment. Besides, the export-import process should completely be automated. These initiatives would hopefully reduce the undue harassment of traders.