Trade Policy of BANGLADESHBANGLADESH joined the WTO in 1995 to avail the advantages of an open and liberal trading system. In BANGLADESH, the trade liberalization process started in the mid 1980s. Export diversification and import liberalization received the highest priority in early years. Towards the end of the 1980s, import liberalization leapt forward. The government took a number of bold steps, which include liberalization of the trade and foreign investment, strengthening the financial sectors, closing and privatizing some loss-making State-Owned Enterprises (SOE) and taking steps to improve governance.
In the 1990s, the liberalization process was accelerated by progressive reduction of tariff and non-tariff barriers. A major thrust of change in early 1990s was the substitution of the multiple-rate sales tax by a 15 per cent Value Added Tax (VAT). In addition to the dismantling of non-tariff restrictions, there had also been a drastic cut in nominal protection rates over the years. Figure 1 and 2 shows the reduction in tariff barriers as a result of the liberalization process.Figure 1. Trends in Reduction of Customs Duty Rate
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 11.
Figure 2. Trends in Reduction of Number of Tariff Rates
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 10.
The customs tariff is the main instrument of BANGLADESH's trade policy. It is also the government's principal source of revenue, accounting for nearly one third of total taxes. BANGLADESH has made considerable efforts to simplify and rationalize the tariff structure by reducing the number of tariff bands from 15 in 1992/93 to 5 in 1999/2000, and lowering the maximum tariff rate from 300 to 37.5 per cent during the same period. Direct subsidies are provided to exporters of textiles and clothing, and were recently extended to exporters of some other products. BANGLADESH has further opened up many of the state-dominated sectors to private investment such as telecommunications, power generation, and transport. In an effort to encourage investment, the government offers a wide range of open-ended tax incentives, notably tax holidays and accelerated depreciation.
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 11.
Figure 2. Trends in Reduction of Number of Tariff Rates
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 10.
The customs tariff is the main instrument of BANGLADESH's trade policy. It is also the government's principal source of revenue, accounting for nearly one third of total taxes. BANGLADESH has made considerable efforts to simplify and rationalize the tariff structure by reducing the number of tariff bands from 15 in 1992/93 to 5 in 1999/2000, and lowering the maximum tariff rate from 300 to 37.5 per cent during the same period. Direct subsidies are provided to exporters of textiles and clothing, and were recently extended to exporters of some other products. BANGLADESH has further opened up many of the state-dominated sectors to private investment such as telecommunications, power generation, and transport. In an effort to encourage investment, the government offers a wide range of open-ended tax incentives, notably tax holidays and accelerated depreciation.
No comments:
Post a Comment