Duty Cuts On 4,500 Products To Boost Intra-Regional Trade .

The government has moved to cut customs duties on nearly 4,500 products of the South Asian nations in line with a free trade agreement signed seven years ago.

The National Board of Revenue (NBR) will soon issue Statutory Regulatory Order (SRO) making the cuts with retrospective effect from January this year, NBR officials told the FE Tuesday.

The countries which have signed the South Asian Free Trade Agreement (SAFTA) in 2004 will enjoy the benefits of the cuts, aimed at boosting intra-regional trade among the SAFTA nations.

Intra-regional trade in South Asian countries now hovers around a modest five per cent, compared to more than 60 per cent in the South East Asian nations which are grouped under the Association of South East Asian Nations (ASEAN).

Duties on basic raw materials and capital machinery will be brought down to 3.375 per cent from the existing rate of 4.05 per cent, the NBR officials.

"In all, we will reduce customs duties on nearly 4,500 products from the SAFTA countries. We hope the cut will help spur trade among the South Asian nations," said an official.

Eight countries have joined the SAFTA after it was signed in the Pakistani capital of Islamabad in January 2004. The countries are Bangladesh, India, Nepal, Bhutan, Pakistan, Sri Lanka, the Maldives and Afghanistan.

Products falling under higher customs duties will also see duty reductions with the import tax on intermediate goods and raw materials and a number of chemicals being set at 8.43 per cent from 9.52 per cent.

Duties on finished and luxury goods will be reduced to 15.93 from the highest rates of 18.12 per cent.

The SAFTA, being the most significant trade access deal since the sub-continent was part of the British Empire, came into force on January 1, 2006 after two years of dilly-dallying by some big members.

The agreement outlines a 10-year road-map for trade liberalisation among the South Asian economies. It aims at reducing and eliminating customs duties on cross-border trade.

According to the roadmap, customs duties of all goods imported from SAFTA member-countries should be lowered to maximum five per cent to enhancetrade intra-regional trade among member countries.

NBR officials said Bangladesh, along with other SAFTA signatories, have been reducing customs duties on the member-countries' products, in line with the road-map.

Since 2006, the SAFTA nations have cut duty rates of basic, intermediate and finished products to 4.05 per cent, 9.525 per cent and 18.125 per cent from 6.0 per cent, 13 per cent and 25 per cent respectively.

The duties will eventually come down to between five per cent and zero per cent for most of the products by 2016, said a senior NBR official.

He said SAFTA member-countries will meanwhile launch a fresh move to prepare a new set of relaxed trade access rules to help boost greater economic integration of the region.

Experts, however, expressed doubt whether the fresh bouts of tax cuts could improve the intra-regional trade in South Asian.

They said many products that the member-countries produce competitively have been left out of SAFTA duty-cuts and placed in the no-go sensitive list.

Source : thefinancialexpress-bd.com