Deal Policy of BAN-

Deal Policy of BANGLADESH

BANGLADESH joined the WTO in 1995 to benefit the compensation of an open and unbiased trading system. In BANGLADESH, the trade liberalization process started in the mid 1980s. Export diversification and bring in liberalization received the uppermost main concern in early years. Towards the end of the 1980s, import liberalization leapt onward. The administration took a number of bold steps, which include liberalization of the deal and foreign asset, strengthening the monetary sectors, closing and privatizing some loss-making State-Owned Enterprises (SOE) and captivating steps to get better supremacy.

In the 1990s, the liberalization procedure was accelerated by progressive decrease of tax and non-tariff barriers. A main push of change in early 1990s was the replacement of the multiple-rate sales tax by a 15 per cent Value Added Tax (VAT). In adding to the dismantling of non-tariff limits, there had also been a radical cut in nominal defense 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 civilization tariff is the main tool of Bangladesh's trade policy. It is also the government's main source of income, accounting for nearly one third of total taxes. BANGLADESH has made substantial efforts to make simpler and reduce the tariff structure by reducing the number of tax bands from 15 in 1992/93 to 5 in 1999/2000, and lowering the utmost tariff rate from 300 to 37.5 per cent throughout the same era. Direct subsidies are provided to exporters of textiles and clothes, and were recently extended to exporters of some other crop. 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 hearten investment, the government offers a wide variety of open-ended tax incentives, particularly tax holidays and accelerated reduction.