The National Board of Revenue has decided to raise the tax benefit ceiling for the import of hybrid cars up to 2500cc, which was earlier set at 1800cc, for the fiscal year 2013-14 budget.
Sources said, the NBR also issued a Statutory Regulatory Order (SRO) in this regard after getting an approval from the law ministry. The board had earlier sent a proposal to the law ministry for his opinions.
The SRO said the government has amended the issuance of previously published SRO dated on June 11, 2009. With the new SRO, “up to 2500cc” will be replaced at the place of existing “up to 1800cc.”
Under the facility, such vehicles will enjoy 250% supplementary duty waiver while importing 2500cc hybrid cars.
However, the other taxes including 25% import duty, 5% regulatory duty, 15% valued added tax (Vat), 5% advance income tax (AIT) and 3% Advance Trade Vat (ATV) will be imposed on import of hybrid cars having capacity up to 2500cc.
The NBR reportedly took the move to increase the tax benefit ceiling following a directive from Finance Minister Abul Maal Abdul Muhith.
Although NBR officials were against the move stating that the import of hybrid cars should be considered as luxury items import, however, the finance minister issued the directive saying it would encourage people to use environment friendly vehicles.
Meanwhile, NBR member Farid Uddin said the SRO was issued just as a correction, nothing else.
However, stakeholders of the country’s automobile industry said the move would not be effective until a comprehensive policy in this regard is adopted in Bangladesh.
“The government should first think how the decision would affect the economy. The government should also think about the possible impact of such a decision on revenue collection and make sure that it does not create any unusual competition,” Abdul Haque, managing director of Haq’s Bay Automobiles Ltd, told the Dhaka Tribune.
“The country is yet to set any comprehensive plan to deal with it [hybrid cars] in regards to the post-sale services and availability of spare parts. The country still lacks expertise in this regard,” he added.
“We do not manufacture such cars locally. We meet local demand through import. So, if the facility given only to new hybrid cars, it will be a discrimination,” he noted.
Mahbubul Haq Chowdhury Babur, secretary general of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Varvida) said till date the hybrid cars have not been popular due to lack of post-sale service facilities and technical know-how among the local service providers.
He added the market is yet to get momentum and the import of such cars is still low.
“We will work for the technical and after-sale services if the government expands the facilities for the reconditioned hybrid cars along with the new ones,” he opined.