Relief for Bangladesh shippers as tax on exports is lifted

In the face of repeated calls from the exporters, Bangladeshi authorities have withdrawn value added tax (VAT) on port services for export-oriented industries to help businesses facing downturn amid the global economic crisis. The National Board of Revenue (NBR) had granted the provision of 15% VAT on port services for both imported and locally manufactured goods for fully export-oriented industries and factories by issuing two separate statutory regulatory orders (SROs) back in 2019 and 2021. However, last year’s Finance Act ended the “zero rate of VAT” on services relating to the ‘transportation of international transport services and supplies relating to loading on and unloading from ships’, from 1 July 2022, after which the chairman of the Chittagong Port Authority had to start collecting 15% VAT on port services – which hit garment exporters hard, they claimed. Some 45% of containerised goods, mainly raw materials, imported through Chittagong port came under the purview of VAT, raising the cost of exports, mainly garments.