NBR cuts duty on starches

The National Board of Revenue has halved the import duty for manioc starch and other starches, mainly used as raw materials in the textile industry, to 5 percent -- four months after it had hiked the rate.

Manioc starch, also known as cassava starch, and other starches are used to treat yarn before weaving.

The government raised the import duty to 10 percent from its previous 5 percent during the passage of budget for the current fiscal year.

But recently, the Internal Resources Division under the finance ministry has issued a notification, saying the duty has been cut back to 5 percent.

The move comes after the Directorate of Customs Intelligence and Investi-gation found proof that the starches, which are imported duty-free by export-oriented industries under bond benefits, were sold in the domestic market through abuse of the privilege.

Syed Munibur Rahman, secretary general of Bangladesh Starch and Derivatives Manufacturers and Traders Association, opposed the move.

“It was a good decision by the government to accord protection to the local industry as an incentive. But the latest move will nullify the government's earlier decision.”

The association had urged the government, several times before, to impose higher duty on various items, including maize (corn) starch, to encourage expansion of industry and safeguard the interest of farmers.

Currently, three local firms are engaged in processing cassava, maize, and sweet potato to make starch, liquid glucose, corn oil, oil cake and other items.

Some factories are also in the process of setting up units to produce starches, according to the association.