Tourism Corporation, NBR at loggerheads over import duty of liquor

Bangladesh Tourism Corporation and the National Board of Revenue (NBR) have been at loggerheads with each other over settling import duty of liquor and alcoholic beverages, pushing this growing market into the hands of adulterers, an official of the finance division said.

The Tourism Corporation wants to pay the duty, estimating the bulk prices of the imported drinks as NBR demands that duty be paid as per retail prices. As the impasse continues, incoming shipment of liquor--- various spirits, beer and whisky--- has almost stopped.

Under such a circumstance, the Ministry of Aviation and Tourism, NBR, the Finance Division and the Tourism Corporation will hold a meeting next week to resolve the knot.

On June 22 this year, the Parliamentary Committee on the Ministry of Civil Aviation and Tourism recommended trimming duties on imported alcoholic beverages to let it help grow the economy through an increase in revenue and expansion of the tourism industry. In the backdrop of that suggestion, the Ministry of Civil Aviation and Tourism is going to organise the meeting on August 30.

The finance division official told Business Insider Bangladesh on Wednesday that Bangladesh Tourism Corporation imports liquor and beer in bulk from the world market at wholesale prices. But, the NBR wants to collect the duty by calculating the retail prices of liquor and beer in the exporting countries.

Tourism Corporation imports liquor by opening up LCs but NBR refuses to accept it, only to allow a looming crisis.

“If you learn about this issue, you find that many people buy alcohol and beer from the black market due to its high import duty. We have demanded that the government cut the duties to stop the sales of adulterated liquor-beer-whisky, etcetera,” Chairman of Bangladesh Tourism Corporation, Ali Qader told Business Insider Bangladesh.

According to Tourism Corporation sources, in the case of importing liquor or whiskey, additional duty of 350 percent along with VAT, customs duty, regulatory duty, advance income tax, advance tax (AT), landing charge, insurance, value added tax are to be paid. In other words, these all payments comprise 425 percent duty and taxes. Similarly, in the case of the import of beer, a total of 310 percent duty and taxes have to be paid. On top of it, some 250 percent supplementary duty is applicable.

The private bar and club owners procure alcohol from the gray market (products produced in one country and sold in another country without permission) as the price of imported liquor has been so high. As a result, the government is deprived of a huge amount of revenue. If the existing VAT, tax, duty and other tax rates are cut, the owners of these bars and clubs will be interested in purchasing the legal liquor. It will then eventually raise the NBR’s revenue. Considering all these things, the parliamentary committee has advised the Ministry of Civil Aviation and Finance Division to take necessary measures to lessen the import duties of imported alcoholic beverages.

Bangladesh Tourism Corporation imported liquor and beer worth 7 lakh dollars in the fiscal year 2021-22. In the previous financial year, the amount aggregated 11 lakh dollars.

But, due to high customs duty and reduction of legal import of liquor and beer amid the Covid-19 pandemic, adulterated liquor and beer have been spilling across the market.

However, there is no question of compromising the quality of liquor supplied by the gray market. Many people love to drink beer and other hard drinks in the country, purchasing them from the gray market at lower prices.

In the last two years, many people have died across the country, including in the capital Dhaka after drinking adulterated drinks. Some Russian officials of the Rooppur nuclear power plant died of stale alcohol consumption. As the matter is tangible, the officials concerned are worried.

In this regard, the Tourism Corporation says that if the customers are allowed to buy alcoholic beverages at lower prices, the issue of their health risks could be mitigated and the revenue will rise.

A good number of foreign nationals working in the country are declared as privileged persons and have been issued availability cards to purchase alcoholic products. They would love to have these products at affordable prices.

Meanwhile, there is a disparity in tax rates on domestic and foreign beer. The NBR has set duty on local Hunter beer at 35 percent considering it a local product. But, a foreign beer, such as Heineken, has to pay 345 percent. The tourism corporation has also demanded to reduce this disparity in tax rates.