Govt wants to be more tough on reconditioned cars

Govt wants to be more tough on reconditioned cars

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In a bid to reduce the import of reconditioned cars and encourage the import of new environment-friendly and fuel-efficient vehicles, the government seems to be harsh in the next budget on the import of used cars.
According to sources at the National Board of Revenue (NBR), the government might change the depreciation rates on the reconditioned cars, which will also help the government get more revenue.Currently, more than six months but less than one year’s of old vehicles get 15 percent depreciation, above one year but less than two years of old vehicles 30 percent, above two years but less than three years of old 35 percent, above three years but less than four years of old vehicles 40 percent and above four years but up to five years of old vehicles 45 percent.
Originally, there was no depreciation for one year-old cars in the budget for 2013-14 fiscal.
But the NBR through a Statutory Regulatory Order (SRO), dated March 9, gave the reconditioned car importers a scope as they asked for it. It also reduced the deprecation 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 131 percent on 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 to the country.
In the 35th Consultative Meeting of NBR that 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.
Talking about the issue, NBR officials said that the Finance Minister has already mentioned in different forums that he is not in favour of the import of old cars.
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 money for dumping cars in the dumping ground.
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 to encourage the use of environment-friendly and fuel-efficient vehicles.
Under the facility, the importers will get the waiver of 250 percent Supplementary Duty (SD) on import of 2500CC hybrid cars.
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. According to the NBR officials, 25 percent import duty, 5 percent regulatory duty, 15 percent Valued Added Tax (VAT), 5 percent advance income tax (AIT) and 3 percent Advance Trade VAT (ATV) will be imposed on import of such cars having the capacity up to 2500 cc as usually.
The announcement might come in the upcoming budget, too. Finance Minister AMA Muhith will announce the proposed budget for the next fiscal in Parliament on June 5.
Muhith at different recent pre-budget meetings said the size of the budget for 2014-15 would be around Tk 2,50,000 crore, with setting the possible revenue target at around Tk 1,49,000 crore. – UNB

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