Flawed Customs Processes, Not Tariffs, Are the Primary Hurdles to Global Trade

Senior officials have admitted that Bangladesh’s trade competitiveness is being crippled by inconsistent customs enforcement and weak service delivery, rather than high tariff rates alone.

Speaking at a seminar on Sunday, National Board of Revenue (NBR) Chairman Abdur Rahman Khan acknowledged that systemic failures at the border are frustrating both domestic businesses and international trade partners. Service Gaps Over Shadow Tax Rates While Bangladesh maintains some of the highest tariff rates globally, Khan emphasized that the primary source of dissatisfaction is "service discrimination." "There should be no scope for different valuations for the same goods, from the same country, assessed by the same officer on the same day," Khan stated. He noted that such discrepancies are now being monitored at the supervisory level to ensure uniformity. Despite efforts to digitize and align with global standards, significant gaps remain in: • Analytical Capacity: Difficulty in verifying complex shipments. • Uniform Delivery: Inconsistent application of rules across different customs houses. • Economic Programs: The "Authorized Economic Operator" (AEO) program remains sluggish, with only 21 operators approved despite dozens of pending applications. Shifting Focus to Trade Facilitation The role of customs has evolved significantly since 1972, when it accounted for 90% of total revenue. Today, it contributes only 22–23%, with VAT and income tax making up the bulk of collections. Commerce Secretary Mohammad Mahbubur Rahman added that trade partners, including the European Union, are increasingly prioritizing process simplification over tariff reductions. Of the concerns recently raised by the EU, approximately 15 were related directly to customs procedures rather than national laws. The Graduation Challenge As Bangladesh prepares to graduate from Least Developed Country (LDC) status, modernization has become a matter of economic survival. The country is currently negotiating trade agreements with Japan, South Korea, the EU, Australia, and Canada. Zaidi Sattar, chairman of the Policy Research Institute, warned that Bangladesh risks falling behind global competitors if it fails to rationalize tariffs and streamline border procedures within the next three to five years.