Traders’ threatens to supply halt from today

Staff reporter :

The LPG Operators Association of Bangladesh (LOAB) has proposed shifting value-added tax (VAT) collection on liquefied petroleum gas (LPG) from the production stage to the import stage to stabilise the market and ensure a fair business environment.

In a letter to the National Board of Revenue (NBR) on Wednesday, LOAB recommended scrapping the existing 7.5 percent VAT and 2 percent advance tax at the production stage and introducing a single 10 percent VAT at the import stage.

Meanwhile, LPG traders have threatened to halt supply nationwide from January 8 if the Bangladesh Energy Regulatory Commission (BERC) does not revise prices.

Traders claim pricing decisions without consultation, regulatory raids and rising costs have worsened the crisis, leaving a supply gap of nearly 60 percent.

The association (LOAB) said the move would simplify tax administration, improve transparency and potentially increase government revenue.

LOAB President Mohammad Amirul Haque said the current advance tax system ties up working capital and creates liquidity pressure for operators, while VAT at the production stage is sometimes evaded.

Collecting VAT at the import stage, he added, would reduce evasion and ease cash flow constraints across the supply chain.

The proposal comes amid volatility in the bottled LPG market, driven by rising demand and regulatory uncertainty. Earlier on January 4, the Ministry of Power, Energy and Mineral Resources agreed to seek a VAT reduction for the sector and discussed declaring LPG a “green industry,” along with providing low-interest loans.

NBR officials said they are considering a 10 percent import-stage VAT while exempting local production and trading stages, which would eliminate multiple layers of VAT collection.

A gazette notification may be issued soon. Currently, the NBR earns about Tk700 crore annually from the LPG sector.