In a bid to keep edible oil prices affordable, the National Board of Revenue (NBR) has reduced the value-added tax (VAT) on soybean oil across the import, production, and retail stages.
Additionally, VAT and advance taxes have been slashed on sunflower and canola oils.
A notification issued by the Internal Resources Division of the Ministry of Finance confirmed the move, effective Monday (December 16), and set to remain in force until March 31. The Public Relations Department of the NBR announced the details.
The notification says that refined and unrefined soybean oil, refined and unrefined palm oil, unrefined sunflower oil, and unrefined canola oil are now exempt from the 5% VAT at the import level. Furthermore, refined soybean and palm oil will be exempt from VAT at the domestic production stage. Importers of crude and refined sunflower and canola oils will also benefit from advance tax exemptions.
The NBR clarified that VAT on the sale of sunflower, canola, soybean, and palm oil at the local level has been fully waived.
The VAT on importing these products has also been reduced from 15% to 5%, leaving only the 5% VAT applicable at the import stage.
The removal of customs duty, regulatory duty, advance tax, and advance income tax on sunflower and canola oils is expected to lower their import costs by Tk 40-50 per liter.
Price hikes persist despite tax reductions
This development comes shortly after the government raised soybean oil prices by Tk 8 per liter on December 9. As a result, bottled soybean oil now retails at Tk 175 per liter, while unprocessed soybean and palm oil prices have both climbed to Tk 157 per liter. The price of a five-liter bottle of soybean oil has risen from Tk 818 to Tk 860.
Despite these price hikes, the market remains volatile. In response, the Bangladesh Trade and Tariff Commission (BTTC) has proposed imposing a 25% regulatory duty on the export of rice bran oil (both crude and refined) to ensure an adequate supply of edible oil domestically.
The government hopes that these VAT and tax reductions will stabilize the edible oil market and ease the financial burden on consumers.
However, experts caution that sustained monitoring and regulation will be crucial to achieving long-term price control.