NBR imposes 1% source tax on edible oil to collect Tk 600cr

The National Board of Revenue (NBR) has imposed a one percent tax at source on the import of edible oil, such as soybean, sunflower, palm, and corn oil, aiming to collect nearly Tk 600 crore in revenue.

The NBR issued a statutory regulatory order (SRO) on Monday, and it will apply to both crude and refined soybean oil as well as other edible oils.

Importers worry the new tax will raise consumer prices, but NBR officials insist it will not affect oil prices since the tax can be adjusted later.

These items, once treated as essentials, were previously exempt from import-stage source tax.

NBR officials said the move aims to curb tax evasion by collecting in advance rather than at the sales or turnover stage.

Md Shafiul Ather Taslim, director of finance and operations at TK Group, said a one percent advance income tax (AIT) at the import stage would raise product costs, which could eventually push up consumer prices.

"This has been tagged as a minimum tax. That means, whether I make a profit or loss, I have to pay it. Since it is fixed, it ultimately becomes a cost. Even if I incur a loss, I still have to pay," he said.

"In the case of profit, I can adjust it, but in the case of loss, I cannot, because payment is mandatory regardless. Ultimately, this 1 percent gets added as a cost if there is a loss," he added.

However, a top official from the NBR, requesting anonymity, told The Daily Star, "Currently, edible oil companies pay one percent tax on turnover. If the tax is collected at the import stage, companies will have the option to adjust it later. So, there is no reason for prices to rise."

Asked about the reason, he said, "The government wants to collect the revenue earlier. Nearly Tk 500-600 crore can be collected from this move."