Top exporters of woven and knitwear have raised concerns to the revenue board about a few dishonest traders taking advantage of the bonded warehouse facility without facing repercussions, leaving legitimate businesses to bear the brunt of the consequences.
The presidents of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), representing over 80% of national exports, stated that none of their members are engaged in such malpractices.
During a recent “Meet the Business” event hosted by the National Board of Revenue (NBR) in Dhaka, the two presidents urged the revenue authority to identify and take action against the wrongdoers misusing the bonded warehouse system.
The bonded warehouse scheme allows export-oriented companies to import raw materials and intermediate goods duty-free. However, there are allegations that some of these materials are diverted to the local market.
BKMEA President Mohammad Hatem highlighted that those exploiting the system rarely face consequences, as they have connections that enable them to bypass regulations effortlessly. This unfair practice burdens honest businesses that comply with tax regulations and export requirements.
Hatem emphasized the necessity for visible and decisive action against offenders, suggesting that revealing their identities and imposing social and legal penalties would deter misuse and offer relief to compliant businesses.
BGMEA President Mahmud Hasan Khan echoed these sentiments, urging the revenue board to take strict measures against those abusing the bonded warehouse facility. Khan emphasized the importance of transparency and accountability, stating that any members found misusing the system would have their membership revoked.
While acknowledging some instances of non-compliance within their membership, Khan argued against the widespread prevalence of abuse as often claimed, noting that the BGMEA has already issued warnings to 22 member factories regarding adherence to regulations.
During the event, Khan criticized the NBR for policy inconsistencies and advocated for parliamentary oversight in granting exemptions and revoking existing facilities to prevent sudden changes that could adversely affect businesses.
Hatem expressed frustration over ongoing disputes related to HS codes and the frequent transfer of revenue officers, citing instances where legitimate exporters faced delays and financial losses due to administrative inefficiencies and lack of consideration.
NBR Chairman Md Abdur Rahman Khan announced the mandatory implementation of the Customs Bond Management System from December 1 to streamline duty-free imports under the bonded warehouse system. This automated platform aims to enhance efficiency, eliminate misuse, and protect compliant taxpayers.
Chairman Khan assured that the automated system would enforce accountability for those exploiting facilities or evading taxes while safeguarding honest taxpayers. Additionally, he emphasized the importance of training and evaluating revenue officers to maintain standards and address operational challenges effectively.