The Bangladeshi government has issued a statutory regulatory order (SRO) imposing 15 percent value added tax (VAT) on the import of mild steel (MS) rods and bars.
The new VAT, effective from May 12, has been imposed in addition to the existing seven percent customs duty, raising the total duty on the import of foreign rods and bars to 21 percent.
Last week, Bangladesh's National Board of Revenue (NBR) issued the new SRO with immediate effect. This government order came in response to calls by local steel mills and re-rollers to increase the duty on foreign steel imports in order to protect local steel producers.
Bangladesh's ministry of finance approved the SRO on April 20, but it took 22 more days for the NBR to issue the SRO.
Before 2008, wire rods imported into Bangladesh were subject to much higher duties. However, the Bangladeshi government cancelled most of the duties in 2008 due to the inflamed domestic market situation and high inflation.