The ministry has proposed reducing the VAT on LPG imports to below 10% in response to the ongoing supply shortage
A letter has been sent to the NBR requesting tax relief on both imports and domestic production in light of the winter crisis.
The Ministry of Power, Energy and Mineral Resources has proposed reducing the value-added tax (VAT) on liquefied petroleum gas (LPG) imports to below 10 percent by reinstating a 15 percent VAT exemption at the import stage, aiming to ease the ongoing supply crunch.
In a letter sent to the National Board of Revenue (NBR) today, the ministry also recommended waiving the current 7.5 percent VAT on domestic LPG production, VAT at the trader level, and advance income tax.
The ministry noted that about 98 percent of the country’s LPG demand is met through imports by private companies, serving both households and industrial users.
The letter highlighted that LPG supply typically tightens in winter, both globally and locally, pushing prices up. Winter demand rises as piped natural gas supply drops, increasing dependence on LPG. “These factors have resulted in an acute LPG shortage in the market, affecting daily life,” the ministry said.
The issue was discussed at an advisory council meeting on December 18. The Internal Resources Division deemed it timely to withdraw the existing 15 percent import-stage VAT exemption and replace it with a reduced 10 percent rate, alongside exemptions for local production and trading. Following consultations with the LPG Operators Association of Bangladesh (LOAB), the ministry formally submitted these recommendations to the NBR.
Meanwhile, the LP Gas Traders Cooperative Society announced an indefinite nationwide strike from today, halting LPG marketing and supply while demanding higher distribution and retail charges.
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