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Bangladesh Faces Economic Fall Without Urgent Tariff Reforms in 5 Years

An economist warns Bangladesh risks falling behind peer economies without radical trade and tariff reforms within five years. The country's tariff regime is described as very high and complex, weakening global competitiveness. Officials highlight that cumbersome customs procedures and non-tariff barriers are major concerns for trading partners. The urgency is heightened as Bangladesh prepares to graduate from the UN's Least Developed Country category.

Key Points: Bangladesh Must Reform Tariffs or Fall Behind: Report

  • Tariff regime is high and complex
  • Reform backlog over 16 years
  • Customs procedures raise costs
  • LDC graduation increases urgency
  • Non-tariff barriers impede trade
2 min read

Bangladesh must urgently reform tariff regime or risk falling behind peers: Report

Economist warns Bangladesh needs radical trade policy and tariff reforms within five years to avoid falling behind competing economies.

"If radical changes are not implemented within the next five years... the country's economy will fall behind. - Zaidi Sattar"

New Delhi, Jan 27

Bangladesh could fall behind peer nations and competing economies without radical reforms in tariffs and trade facilitation within five years, an economist warned, according to a new report.

Bangladesh-based media house 'The Daily Star' cited chairman of the Policy Research Institute of Bangladesh Zaidi Sattar calling for urgent reforms as the country has not undertaken significant trade policy reforms for around 16 years.

Zattar warned at an event marking International Customs Day 2026 at the National Board of Revenue headquarters in Agargaon that the backlog of reform work has now piled up which is weakening the country's competitiveness in the global value chain, the report said.

"Compared to international standards, Bangladesh's tariff regime is very high and extremely complex which weakens the country's competitiveness in global value," said Sattar, adding that cumbersome customs procedures raise compliance costs calling for radical liberalisation of the trade policy.

"If radical changes are not implemented within the next five years-particularly in tariff rationalisation, tariff modernisation, and trade facilitation-the country's economy will fall behind many other competitive economies," Sattar said according to the report.

Zattar was hopeful that Bangladesh would move towards a modern customs administration prioritising trade facilitation over revenue collection, as trade taxes currently account for around 2.5 per cent of GDP.

The economist urged that the trade taxes should drop to a maximum of1 per cent by 2030.

Commerce Secretary Mahbubur Rahman also noted non-tariff barriers continuing to impede trade and he called on the National Board of Revenue (NBR) to prioritise simplification of the trade regime.

According to him, European Commission officials who recently visited the country raised a long list of concerns, many of which were linked to customs procedures.

"People are not really asking us to remove high tariffs. They are raising concerns over legitimate technical barriers to trade," Mahbubur Rahman said.

Bangladesh's upcoming graduation out of UN's Least Developed Country (LDC) category has made trade facilitation more urgent, as the country seeks to retain preferential market access through agreements with key partners, Rahman added.

- IANS

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Reader Comments

P
Priya S
Complex customs procedures are a nightmare for any business, big or small. If they want to attract investment and compete globally, they must simplify this. We faced similar issues in India a decade ago, and reforms like GST, while challenging, have helped streamline things. Bangladesh should learn from regional examples.
R
Rohit P
The economist is right. 16 years without major trade policy reform is too long in today's fast-moving world. Their garment industry is strong, but they need to diversify and integrate into global value chains. High tariffs might protect some local industries in the short term, but they stifle innovation and efficiency in the long run.
S
Sarah B
Interesting to see the European Commission's concerns mentioned. Non-tariff barriers and technical standards are often bigger hurdles than tariffs themselves. If Bangladesh wants to keep its preferential access to EU markets after LDC graduation, aligning with international customs and quality norms is non-negotiable.
V
Vikram M
As an Indian exporter, I can confirm that dealing with complex customs in any country increases costs and delays. A more efficient Bangladesh is good for all of South Asia's trade. It would boost our NE region's connectivity too. Hope they prioritize trade facilitation over mere revenue collection.
K
Karthik V
While the need for reform is clear, I hope it's done thoughtfully. A sudden, radical drop in trade taxes from 2.5% to 1% of GDP could hurt government revenues if not managed alongside other tax reforms. The goal should be a balanced, modern system that supports both trade and sustainable public finance.

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