NBR loses revenue by raising duty on baggage gold

The National Board of Revenue (NBR) had planned to earn more revenue by raising duties. In reality, the opposite has happened. To prevent the wastage of foreign currency, stop smuggling and money laundering, and compel expatriates to send remittances through legal banking channels, the NBR imposed high duties and strict restrictions on the legal import of gold. Since then, the volume of incoming gold through Chattogram's Shah Amanat International Airport has plummeted. As a result, the government has lost nearly Tk 750 crore in direct revenue over the past four years.

In the 2022-23 fiscal year, under the baggage rules, passengers could bring a maximum of two gold bars (234 grams) by paying Tk 2,000 per bhori in duty. In June 2023, that duty was suddenly doubled to Tk 4,000 per bhori.

Subsequently, by amending the baggage rules, the facility of bringing a maximum of two bars (20 bhori) per passenger was reduced, and a strict rule was introduced allowing only one bar (10 bhori or 117 grams) per year. That is, to bring one gold bar legally, about Tk 42,000 in duty has to be paid. Due to such strict restrictions, the revenue board effectively made it difficult to bring gold legally. Since then, the arrival of gold bars through legal channels has plummeted. The sector of Chattogram Customs that used to generate a guaranteed revenue of Tk 350 crore annually has fallen to Tk 100 crore.

By doubling the duty and imposing restrictions, the government's objective was to discourage expatriates from spending money on buying gold and increase remittances through banking channels. Along with that, to overcome the country's dollar crisis. To protect legal commercial importers. To prevent money laundering by the hundi syndicate. To prevent smuggling to India and the transit route.

Khondaker Golam Moazzem, a fellow at the Centre for Policy Dialogue (CPD), says it has been proven that hundi cannot be stopped by raising or lowering duties. Gold is still coming through legal and illegal channels. Smuggling is involved in this arrival. Dollar transactions are involved.

The CPD researcher's suggestion is, "There is no official knowledge of how much gold is coming into the country, how much demand there is, through which channels it is smuggled, and how much is used in the country. This informal channel must be identified and stopped. Surveillance must be increased. Emphasis must be placed on documentation. Strict monitoring of transactions is needed. Only then will results be achieved."

Statistics from Chattogram Customs House show that when the rules were easy, in the 2022-23 fiscal year, 172,514 gold bars came legally through Chattogram Airport. Their weight was about 2,122 kg (2 tons), with a current market value of about Tk 24,500 crore. If each gold bar is 10 bhori, the total amount of gold stands at 1,725,140 bhori. That is, in just one year, gold bars worth over Tk 24,500 crore came into the country.After the duty was doubled in the 2023 budget, the picture changed. In the 2023-24 fiscal year, passengers legally brought only 27,546 gold bars, with a total weight of 3,212 kg. Their current market value is about Tk 3,939 crore. In contrast, customs received Tk 108 crore in revenue.In the 2024-25 fiscal year, the number of bars fell to 21,567 (weighing 2,515 kg), from which revenue of Tk 101 crore came. In the latest 2025-26 fiscal year, even fewer gold bars arrived — 21,439 (weighing 2,509 kg), from which Customs received Tk 102 crore in revenue. That is, over the past three fiscal years, along with the decline in legally bringing gold through the airport by paying duty, Customs revenue has also stagnated at around Tk 101 to 108 crore.Although the government lost revenue due to the legal channel being blocked, international smuggling syndicates and hundi operators benefited. Previously, ordinary expatriates used to bring gold legally by paying duty for their families or known jewelers and make a small profit. When the duty was set at Tk 5,000 per bhori, bringing gold legally became unprofitable. Middle East-based smuggling rings seized this opportunity. An exclusive opportunity was created to evade Tk 50,000 per bar and Tk 8 to 10 lakh per kg in duty. Local hundi operators collected the foreign currency earned by expatriate workers in the Middle East and bought gold from Dubai. Bringing that gold through smuggling routes, the hundi syndicate and smugglers pocketed profits worth hundreds of crores of taka.Pranab Saha, general secretary of the Bangladesh Jewellers Association (Bajus) Chattogram, said, "By raising duties, the government's revenue did not increase. It decreased instead. So who benefited? Go back to the previous duty. Make the policy easy. The government will get huge revenue. At the same time, make strict policies to stop smuggling and implement them."Now the question is whether the arrival of gold illegally has decreased due to the restrictions. The answer is "no." According to Customs estimates, over four fiscal years from 2022-23 to 2025-26, a total of 1,111 illegal gold bars were seized from passengers at Chattogram Shah Amanat International Airport, with a total weight of 129 kg. The highest number, 458 bars, were seized in the 2022-23 fiscal year, 205 in 2023-24, 211 in 2024-25, and 237 in 2025-26. With the current average market price of gold in the country at about Tk 2.2 lakh per bhori, the current market value of these seized bars is Tk 250 crore.