The government has reduced the value-added tax (VAT) on imports of crude and refined soybean oil, palm oil, and other edible oils to 10 per cent from the existing 15 per cent, according to a Statutory Regulatory Order (SRO) issued by the Internal Resources Division (IRD) on Thursday.

Through another SRO, the division exempted all VAT on local production and trading stages of edible oils. The reduced VAT will remain effective until December 15 this year.

 The development came two days after the Bangladesh Trade and Tariff Commission recommended the revenue administration to cut the indirect taxes to contain prices of edible oil and inflation, which has been hovering around 9 per cent since March 2023.

The directives were announced through separate notifications on Thursday.

In one of the notifications, the VAT on the import of soybean and palm oils - both refined and unrefined - was reduced from 15 per cent to 10 per cent. The second notification stated the VAT exemption on refined soybean and palm oil at the production and trading levels.

On Feb 7, the National Board of Revenue, or NBR, imposed a 5 per cent reduction on the VAT on edible oil, keeping the month of Ramadan in mind. However, the 5 per cent reduction was lifted on Apr 15 as traders announced to increase the price of cooking oil by Tk 10 per kg the following day.