The government has taken effective digitalisation and automation measures in a bid to reduce hassle and delay in export and import activities, but “Smart Customs,” which is crucial for vibrant international trade, curbing money laundering, and cutting tax evasion, is still far away.
Customs is plagued with allegations of bribery, inefficiency, hassle, and harassment, brought forth by the export and import-oriented businesses, which in turn has been pushing up the cost and difficulty of doing business in Bangladesh, amid a persistent global economic crisis.
Amid this backdrop, the customs wing, under the National Board of Revenue (NBR), is set to mark the International Customs Day 2024 on Friday. The World Customs Organization (WCO) is dedicating 2024 to “Customs Engaging Traditional and New Partners with Purpose.”
The NBR will organise a seminar on International Customs Day 2024 and provide WCO Certificate of Merit 2024 to its best officials in different arenas. Finance Minister Abul Hassan Mahmood Ali will be chief guest at the event, held in the capital’s NBR Building.
Tough days could be ahead
From the very beginning, Bangladesh's revenue stream has been mostly dependent on customs as people are often hesitant to pay income tax, while a significant segment of the country’s population are under the poverty line.
But nowadays, the NBR revenue at the customs stage is down to around 30 per cent of total collection. The officials, on multiple occasions, have expressed concerns about a further decrease in revenue after Bangladesh graduates from the least-developed country (LDC) status.
As the tariff benefits may decrease after LCD graduation, and Bangladesh may have to modernise the tariff structure and diversify the export basket to deal with the post-LDC challenges, local industries may face stiff competition due to tariff rationalisation.
The review of duty structures may have an impact on the overall revenue income, and local industries will lose their competitive edge due to the withdrawal of so many protective duties – which they have been enjoying for a long time.
In a recent report, the United Nations Conference on Trade and Development (UNCTAD) made an observation that Bangladesh is likely to lose 14.28 per cent or $5.73 billion worth of export earnings annually after its graduation to a developing nation from the least-developed country (LDC) status.
To avert this fate, experts and businesses termed smart and hassle-free customs as the only solution.
On a transformative journey
With a strong focus on harnessing the power of technologies, Bangladesh Customs has embarked on a transformative journey to digitise and optimize various aspects of Customs procedures, according to the Customs Automation Branch under Customs Policy & ICT Wing.
The ASYCUDA System, Customs Automation Upgradation to encompass a comprehensive transformation of Server Infrastructure, Storage Systems, Network Infrastructure, Data Centers; Integration with BEPZA to curb evasion and so many things are introduced there.
The ASYCUDA System is now used in 6 Custom Houses, 38 Customs Stations and 20 Off-docks in Bangladesh.
However, still the average time required to complete the import clearance process at Benapole land port is over 10 days, according to the latest time release study (TRS) prepared by NBR.
The corresponding time for doing the same job in Chattogram and Dhaka is over 11 days and over 7 days consecutively. The average time to complete the import clearance process in Chattogram for pharmaceutical goods is over 14 days.
Surprisingly, a major share of 72 per cent – 78 per cent of the clearance processing time is spent on collecting and submitting import documents, the report reads.
Meanwhile, introducing the National Single Window (NSW) to reduce the time and cost of doing business is still a far cry as the project is progressing at a snail’s pace even after six years of starting its implementation.
As per the National Board of Revenue (NBR), which is implementing the project, around 319,000 traders – exporters and importers – are expected to be benefitted in the fifth year of the implementation of the NSW.
The Federation of Bangladesh Chamber of Commerce Industry (FBCCI) president Mahbubul Alam during a courtesy visit to the newly Finance Minister commented on the importance of simplifying tax management, promoting cleanliness and accountability, and increasing government revenue through the expansion of business, commerce, and industrial activities in the country.
He mentioned the potential for an increase in revenue through automation.
NBR chairman Abu Hena Md Rahmatul Muneem, during a press briefing Thursday on International Customs Day, said, “A system has been developed for streamlining the Chattogram Custom House. We are working.
“Efforts are underway for the development of infrastructure to enhance the capacity of the customs house. Concurrently, proposals for increasing manpower have been put forward.”
He stated that the primary goal of customs is to create an investment-friendly environment by automation, emphasising the importance of customs in ensuring the safety of civic life and facilitating smooth international travel routes.
