In a bid to reduce the import of reconditioned cars and encourage the import of new environment-friendly and fuel-efficient vehicles, the government proposed harsh measures on the import of used cars in the upcoming budget.
National Board of Revenue (NBR) sources said the government might revise the depreciation rates on the reconditioned cars, which will also help the government garner more revenue.
Currently, more than six months but less than one year’s old vehicles get 15 percent depreciation, 30 percent to the vehicles above one year but less than two years old, 35 percent to the above two years but less than three years old, 40 percent to the above three years but less than four years old vehicles, and 45 percent to the vehicles above four years but up to five years old.
Initially, there was no depreciation for one year old cars in the budget for 2013-14 fiscal year.
But through a Statutory Regulatory Order (SRO), dated March 9, the NBR reduced the depreciation facility by five percent for used cars, aged between one to two years of age.
According to the importers, now the maximum import duty is 841 percent while minimum is 131 percent on the reconditioned motor vehicles.
Finance Minister AMA Muhith in a recent pre-budget meeting with Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) said the government wants to discourage the import of reconditioned cars into the country.
In the 35th Consultative Meeting of NBR that was jointly organised by NBR and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on May 8, the finance minister said he had sent 18 notes to the NBR regarding the import of reconditioned and brand new cars for including in the next budget.
When contacted, the NBR officials told the UNB that the minister has already mentioned that he is not in favour of the import of old cars in different forums.
They said importing old cars means allowing the developed nations to use Bangladesh as the dumping ground of their old vehicles.
Usually in Japan, from where the reconditioned cars come, its government charges a hefty amount of levy for dumping cars in the dumping grounds.
Meanwhile, the NBR has decided to raise the tax benefit ceiling on import of hybrid cars to 2500cc from the existing 1800cc, aiming to attract the import of hybrid cars for encouraging the use of environment-friendly and fuel-efficient vehicles.
Under the facility, the importers will get a waiver of 250 percent Supplementary Duty (SD) on import of hybrid cars up to 2500CC.
In the budget for the current fiscal year (FY) 2013-14, the NBR kept the hybrid cars up to 1800cc out of the SD purview.
Earlier, in the FY 2012-13, the importers of hybrid cars up to 2500cc enjoyed the waiver of the SD.
