Automobile

Car Import Taxation in Budget 2013-2014

Bangladesh-Budget-2013-14The reconditioned car traders have expressed mixed reactions to the proposed budget for fiscal year (FY) 2013-14.

They said the effort of the government to reduce the discrimination of import duty between old and new cars is praiseworthy.

But the difference would not be eliminated completely as the authority did not bring about major changes to depreciation rates and duty structures in the budget, they said.

Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) president Md Habib Ullah Dawn welcomed the budget as the government increased depreciation rates slightly which will help reduce the prices of used cars.

The government has increased depreciation rates from 35 per cent to 45 per cent for 1500cc cars in the proposed budget.

The BARVIDA president said if the government could raise the depreciation to 60 per cent, the difference between old and new cars would be removed totally.

The consumers can get a car at a low cost and thus increase revenue collection because of the rise in deprecation rates, said Mr Dawn.

The facilities indicated in the proposed budget are just an eyewash for the importers and would not bring any positive result for the sector, said a trader preferring anonymity.

As per the budget, 45 per cent depreciation has been proposed for 2008-09 model 1500cc cars while for 2010 model it is at 40 per cent, for 2011 model at 35 per cent and 2012 model at 30 per cent.

Following the measures, the prices of 2008-09 and 2010 model cars will be reduced by Tk 115,000 and Tk 70,000 respectively from their total value.

But the price will not be changed for 2011 model cars while it will be increased by around Tk 150,000 for 2012 model ones from the total value.

Earlier the traders got 35 per cent depreciation for all such cars.

The vehicle traders also urged the government to consider their proposals for the revised budget.

Their proposals include waiving import duty on microbus as it carries more people than private car and reducing import duty and cc slab of used cars.

Now the maximum import duty is 841 per cent and minimum 131 per cent on reconditioned motor vehicles, according to the importers.

They said due to tax anomalies and scarcity of bank loans a large number of traders closed their business.

As per data of BARVIDA, the country had imported some 7000 used cars in FY 2012-13 so far. The figures were 1,100 in FY 2011-12 and 19,823 in FY 2010-11.

The revenue earning from used car import might not be more than Tk 9.0 billion in the current FY which would be much less than Tk 13.35 billion of FY 2011-12, the sector leaders said.

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