Metropolis Report –
The Bangladesh Parjatan Corporation (BPC) has proposed to National Board of Revenue (NBR) to reduce high taxes on alcoholic beverages to help develop the tourism sector and meet requirement of international tourists, sources said.
Foreign tourists often complain about the high tariff on liquor, which is much cheaper in other tourist destinations in South Asia.
NBR imposes over 600% tax on liquor that, in turn, encourages smuggling of the commodity, tourism sector experts said.
Bangladesh Parjataon Corporation (BPC) as per recommendation of the Parliamentary Committee on the Ministry of Civil Aviation and Tourism has proposed to reduce tax on alcoholic beverage from 350 per cent to 250 per cent and on bear from 250 per cent to 150 per cent as per recommendation of Parliament Standing Committee on Civil Aviation and Tourism (MoCAT)
Meanwhile, Civil Aviation and Tourism Secretary Md Mokammel Hossain presided over a meeting on August 30, 2022, participated by representatives from finance and commerce ministries, BPC and Customs department on the matter.
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.
Former CEO of Bangladesh Tourism Board (BTB) Javed Ahmed said that the government should revisit the high tariff on liquor by looking at the tax structures of countries like Thailand, India, Nepal, Sri Lanka, the Maldives and Bhutan.
“The high tariff on liquor is one of the barriers to attracting in-bound tourists in the country. This high tariff is also encouraging smuggling of the commodity, resulting in revenue losses for the government,” he added.
RAM Obaidul Muktadir Chowdhury, a lawmaker and chairman of the parliamentary standing committee on Civil Aviation and Tourism Ministry, said the committee has sent proposals to the relevant ministries to rationalize the tariff on liquor.
Citing an example of Morocco — a member of the Organisation of Islamic Cooperation (OIC) — he also proposed to develop exclusive zones to cater to international tourists.
According to Bangladesh 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.
Meanwhile, the Bangladesh Parjatan Corporation (BPC) paid taka 88,287,404 as tax on alcoholic beverage to the government exchequer.
The government is losing revenue worth several thousand crore take as nearly 75 per cent of total liquors are sold in the black market in Bangladesh. A TOAB member that the government can do an independent research on the market size of the alcoholic beverage.
“Strong political will, commitment to curb illegal market of liquor and boost the tourism sector and prudent tax policy will certainly help high tax on the product,’ said the TOAB member.
Sources said a cut in tax on alcoholic beverage will help boost revenue of the government and increase amenities of the foreign tourists.
A high official of the Bangladesh Parjatan Corporation while talking to this correspondent said that the government should relax rules of consuming alcoholic beverage and bring transparency in the policy to rein in balck market.
The present policy is also encouraging the black market and depriving the government of the thousands of crore taka as revenue.
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.
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.
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.
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.
Meanwhile, State Minister for Civil Aviation and Tourism Md Mahbub Ali said that Bangladesh is working on promoting the tourism sector to generate more employment and bring in more investments
The country has set a target to become a developed country by 2041, and as part of that strategy, the government is emphasizing the development of the tourism sector in the country, he added while speaking as the chief guest at a seminar marking the 50th founding anniversary of the BPC.
“The government is eyeing the development of ecotourism and medical tourism in the country, while protecting the environment and promoting our local culture,” Ali further said.
The state minister also said the corporation is implementing 12 development projects worth Tk335 crore to help boost the tourism sector.
BPC has implemented 20 development projects in the last 12 years.
