Import duty on rice may be hiked to 15pc

• The plan is to hike import tax only on branded rice and not on normal rice

Kathmandu, May 15

The government is preparing to raise customs duty on rice, especially branded rice that comparatively costs higher in the domestic market. The Ministry of Agriculture, Land Management and Cooperatives has recommended to the Ministry of Finance to raise customs duty on imported (branded) rice by 10 per cent to 15 per cent through the upcoming budget for the fiscal 2018-19.

The government currently levies five per cent import duty on rice.

According to MoALMC officials, it has recommend that MoF raise customs duty to this effect on rice with grains above seven millimetres in size.

By increasing import duty on such rice, the government intends to promote Nepali rice over foreign brands.

Despite being an agricultural nation with production of paddy increasing in recent years, Nepal has to import huge volumes of rice every year.

In 2016-17, the country imported rice worth more than Rs 24 billion and the import bill of rice is expected to exceed that in the ongoing fiscal. “The plan is to increase import tax only on branded rice and not on normal rice, which is in high demand in the domestic market. This ensures that normal customers will not be affected despite increment in import taxes,” said an official at MoALMC. He added that the government also planned to bring down import duty on rice with grains below seven millimetres in size, the consumption of which is high in the country.

However, officials at MoF hastened to add that the proposal of MoALMC to raise import duty on certain rice brands would be examined thoroughly before any decision was taken.

Consumer rights activists too opined that hiking customs duty on rice was necessary not only to substitute import and promote Nepali agricultural production, but also to discourage the increasing trend of Indian traders exporting Nepali rice under their own brand name.

“Our inspections at customs points have revealed that Indian traders first import Nepali paddy and rice as they are cheaper compared to Indian products and then export them to the Nepali market under an Indian brand name,” said Madhav Timalsina, president of Consumers’ Right Investigation Forum. He added that higher customs duty on imported rice will ultimately increase the demand for Nepali rice and boost production of paddy in the country.

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