BWH policy simplification essential for export diversification
Al Amin :
It is high time to simplify the existing Bonded Ware House (BWH) policy for export diversification and reduction of dependency on a single sector, experts and businesses said.
During the Covid-19 situation, the country men saw the risk of dependency on a single sector because there was a sharp decline of total export earnings due to the cancellation of export orders in the ready-made garment (RMG) sector, they added.
On an average, the RMG contributes more than 80 percent in the country’s export earnings, while all other export sectors contribute 20 -23 percent. In the year 2018-19, only $6.40billion total export was $40.53 billion, of which non-RMG sector contributed. Similarly in 2019-20 FY, RMG earned $27.93 billion while the non-RMG $5.74billion.
“Considering the pre and post Covid-19 changing situation, the country needs to redouble its effort for export diversification and the equal treatment for all non-RMG sectors as it could contribute for the expected export diversification,” said Abul Kasem Khan, Chairman of the Business Initiative Leading Development (BUILD).
Abdul Mazid, former NBR chairman, told The New Nation on Monday, “The sector imports raw materials and exports lion share of its produced goods, should get the BWH facilities to boost country’s export earnings.” “In this case, NBR can bring changes the existing rules and regulations, if it is needed for the sake of encouraging the other sectors,” he added.
Meanwhile, a NBR official says that we have received some proposals from different trade bodies and the concerned wing of the NBR scrutinizing the proposals.
Four important non-RMG export sectors– Leather and leather goods, Plastic, Agro-processing and Electrical and Electronics– have tremendous potentials but could not be able to contribute further because of policy discrimination. Even, though the value addition of this sectors are sometime much better than the RMG sector.
Bonded ware housing means the facility provided to export oriented (EO) industries for importing raw materials and packaging materials without paying any duty or taxes and the National Board of Revenue (NBR) provides the BWH benefits to a wide range of industries to encourage the EO industries.
A temporary rule for EO industries was announced in 1993 for expediting export through simplified movement of raw-materials and export item. Industries under Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Economic Zones (BEZAs) and High-tech parks are enjoying bonded warehouse facility under their respective laws.
The NBR had a specific order on June 17, 2020 which created confusion about the entitlement volume for the EO industries who are availing general BWH facilities including leather and footwear and plastic sector.
In the amendment there was a mention of “compliant Factory”. Later on another office order issued on September 16, 2020 clarified “compliant Factory” but still problem remain unresolved.
The existing EO industries including deemed exporters are facing the problem regarding BWH operational hurdles.
The potential sectors like agro-processing sector are facing problem to apply for the license as there exists two application forms by Customs and CBC where the category of licenses are unclear.
The spirit of bonded warehouse policy for expediting and diversifying export is hampered for BWH policy and operational bottlenecks. To overcome the existing issues, a fresh order can be framed and circulated by NBR clarifying related issues including the entitlement getting process for 100 percent export oriented industries.
It is high time to simplify the existing Bonded Ware House (BWH) policy for export diversification and reduction of dependency on a single sector, experts and businesses said.
During the Covid-19 situation, the country men saw the risk of dependency on a single sector because there was a sharp decline of total export earnings due to the cancellation of export orders in the ready-made garment (RMG) sector, they added.
On an average, the RMG contributes more than 80 percent in the country’s export earnings, while all other export sectors contribute 20 -23 percent. In the year 2018-19, only $6.40billion total export was $40.53 billion, of which non-RMG sector contributed. Similarly in 2019-20 FY, RMG earned $27.93 billion while the non-RMG $5.74billion.
“Considering the pre and post Covid-19 changing situation, the country needs to redouble its effort for export diversification and the equal treatment for all non-RMG sectors as it could contribute for the expected export diversification,” said Abul Kasem Khan, Chairman of the Business Initiative Leading Development (BUILD).
Abdul Mazid, former NBR chairman, told The New Nation on Monday, “The sector imports raw materials and exports lion share of its produced goods, should get the BWH facilities to boost country’s export earnings.” “In this case, NBR can bring changes the existing rules and regulations, if it is needed for the sake of encouraging the other sectors,” he added.
Meanwhile, a NBR official says that we have received some proposals from different trade bodies and the concerned wing of the NBR scrutinizing the proposals.
Four important non-RMG export sectors– Leather and leather goods, Plastic, Agro-processing and Electrical and Electronics– have tremendous potentials but could not be able to contribute further because of policy discrimination. Even, though the value addition of this sectors are sometime much better than the RMG sector.
Bonded ware housing means the facility provided to export oriented (EO) industries for importing raw materials and packaging materials without paying any duty or taxes and the National Board of Revenue (NBR) provides the BWH benefits to a wide range of industries to encourage the EO industries.
A temporary rule for EO industries was announced in 1993 for expediting export through simplified movement of raw-materials and export item. Industries under Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Economic Zones (BEZAs) and High-tech parks are enjoying bonded warehouse facility under their respective laws.
The NBR had a specific order on June 17, 2020 which created confusion about the entitlement volume for the EO industries who are availing general BWH facilities including leather and footwear and plastic sector.
In the amendment there was a mention of “compliant Factory”. Later on another office order issued on September 16, 2020 clarified “compliant Factory” but still problem remain unresolved.
The existing EO industries including deemed exporters are facing the problem regarding BWH operational hurdles.
The potential sectors like agro-processing sector are facing problem to apply for the license as there exists two application forms by Customs and CBC where the category of licenses are unclear.
The spirit of bonded warehouse policy for expediting and diversifying export is hampered for BWH policy and operational bottlenecks. To overcome the existing issues, a fresh order can be framed and circulated by NBR clarifying related issues including the entitlement getting process for 100 percent export oriented industries.
