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Bangladesh, Nepal count on tariff for revenues: WB

Star Business Report
High tariff structures continue to remain the determinant factor in revenue earnings in Bangladesh and Nepal, said a World Bank report released yesterday.
And India, Pakistan and Sri Lanka have been able to reduce the dominance of the tariff-based revenue earnings, said the report titled The Trade Policies in South Asia: An Overview1.
World Bank’s senior economist Zaidi Sattar said Bangladesh have made significant progress towards trade liberalisation but some restric-bnn^su£h as infrastructure devel-opment surcharge^lDSC), supplementary duty, advance income tax (AIT) are overshadowing the achievement.
In South Asia, Bangladesh and Nepal rely heavily on customs duty, which is almost 50 percent of their total revenue earnings. "As a result, opening up of economy faces a lot of resistance," he added.
The senior economist said extending protection to local industries for a particular period of time is good as it enables the industries to become competitive within the protected period of time. "But if the protection is prolonged it leads to inefficiency.’’
Country Director of the World Bank Dhaka Office Christine I
Wallich referring to the trade res trie- tion in Bangladesh said goods are being smuggled due to high tariff.
"As a result, you get the goods but the government is deprived of revenue," she observed.
Asked whether Bangladesh has been benefited from trade liberalisation, particularly from India, Willich said Bangladesh has been benefited by imported goods from India at comparatively cheaper rates.
Focusing on the report, Sattar said the trade among the South Asian countries constitutes only 4.5 percent of their total trade.
"South Asia is more restricted than any other region. Despite progress towards libcrnlisaiioq^ projectionist forces are’s till strong in South Asia, hampering growth and poverty reduction," he added.
The poor of the South Asia would be among the significant beneficiaries of wider and faster trade liberalisation in the region, the report observed.
The Trade Policies in South Asia: An Overview describes key aspects of die current trade regimes in Bangladesh, India, Nepal, Pakistan, and Sri Lanka in South Asia and offers recommendations on some of the key issues facing policymakers on trade reform.