Deter misuse of bond facilities

30 December, 2020 12:00 AM printer

Companies misusing bond facilities is nothing new in Bangladesh. Rather, it seems that the crooked practice has become normal for some name-only companies whose sole purpose is to evade import duty on goods which they sell illegally in the open market. Their audacity bespeaks that they may be in cohorts with some of the government agencies who are supposed to prevent such happenings, otherwise there would not have been hundreds of companies involved in the rampant practice.

Customs Bond Commissionerate (CBC), Dhaka has suspended the bond licences of 125 name-only companies found illegally selling duty-free materials in the local market. But there are hundreds of others who are not yet caught or suspended. If the monitoring system of the companies having bonded warehouse facilities could be more strictly maintained, then the duplicity of illegal trading would stop over time. Why the CBC is not overseeing the companies importing goods under false pretences is puzzling, as it deprives the government of earning a hefty amount of excise duties. On the other hand, it also creates an uneven competition in the market for the goods of genuine importers who are paying all the necessary government taxes but are losing the market to the illegally imported goods.

Bangladesh is a country dependent on valuable foreign exchange earned by the export of readymade garments. To enable the export oriented industries to be competitive in their product pricing, it is essential to extend duty free import facilities for their raw materials and accessories. We would not want to hamper the manufacturing of the export oriented factories in any way. Therefore, an automated system which can be more accurate in finding the loopholes in the bond facilities may be an option to be considered. Massive amounts of goods are imported under the bond facility which is not always humanly possible to track. Therefore, some form of automation must be incorporated in the system to save the government from losing excise duties.

There is no short cut to monitoring the different importers till a more stringent system can be in place to deter the misuse of bonded warehouse facilities.