Reconsider tax burden on commodity market
COVID-19 has been battering the national economy for a year. Millions of people have lost their jobs while others have seen a slash in income. It is difficult to assess the various financial pressures and hardships faced by people in the informal sectors. However, financial pressure is certainly being felt in the daily life of the majority.
Under the circumstances, the price of rice has now increased by 48 per cent, compared prices last year. Rice is not only a source of carbohydrate for the huge number of people in Bangladesh, but also fulfills a big portion of their demand for protein. So, a rise in rice prices is a matter of nutritional concern. This concern is already palpable. The impact of reducing import tariff on rice has not been very significant. The price has dropped only by Tk 2 per kg at the wholesale level. But this has not benefitted the consumers because rice price has not decreased in the retail market yet.
Meanwhile, edible oil prices have shot up. Since last October, the price of bottled edible oil has increased by Tk 22 a litre and recently prices have reportedly become stable at Tk 125 to Tk 130. A report of Prothom Alo on Friday said, after edible oil, the price of sugar has also started rising and it has already increased by Tk 4 to Tk 5 per kg. The price of sugar is Tk 66 to Tk 68 a kg in Open Market Sales (OMS).
Five to six private companies import unrefined edible oil and sugar in our country then market it after refining. They now say that they have been compelled to increase the price of edible oil and sugar because of rise in its prices in the international market. But it’s not certain that how much prices in Bangladesh will rise in comparison to the international market. Besides, news of price hike or a possible surge in international markets instantly increases the price in the country. Even sometimes the prices of products imported are raised before the prices in international market increases. This is a crime. There is no monitoring system in the country. Strong monitoring in the market is essential.
Needless to say, if prices in the international market increase, prices of imported products will also rise in the country. The government should look into what happened regarding edible oil and sugar and whether its impact is consistent with the price hike in our market, and then take measures accordingly.
Financial pressure has been created on the daily livelihood of the majority of the people, so the government should find out ways to stop the pressure or lessen it to some extent. The tax burden including several layers of VAT on imported edible oil and sugar is high.
Taking into consideration the COVID-19 situation, existing tax slabs can be reconsidered for a while to lessen the financial pressure on the daily livelihood of the majority of the people. Besides, ensuring market monitoring, of course, is essential so that price of daily essentials cannot be increased unfairly.