The Bangladesh government may reduce the depreciation facility on import of reconditioned cars in the upcoming national budget for the fiscal year of 2018-2019.
The price of used cars may go up if the decision is finally implemented, officials of the finance ministry said.
They said that the government might also offer duty benefit on import of raw materials for local industries, particularly some manufacturing industries including mobile, computer and motorcycle.
Pharmaceuticals industry may also get duty benefit on import of a basket of raw materials.
It may also reduce duty on import of steel products to keep the price of the products affordable for consumers.
Finance minister Abul Maal Abdul Muhith on Thursday might make the declaration in his budget speech along with other changes to the duty structure for import and export.
National Board of Revenue officials said that they wanted to discourage use of private vehicles and encourage environment-friendly fuel efficient vehicles considering the growing severe traffic congestion in cities and environment pollution.
So, they recommended reduction of depreciation benefit on import of used cars, the officials said.
Currently, importers can avail year-wise depreciation facility up to 40 per cent on import of reconditioned cars.
The rate of facility depends on the age of cars. For example, cars aged between one year and two years get 15 per cent depreciation benefit and cars aged from two years to three years get 25 per cent. The applicable rate is 35 per cent for cars aged up to four years and 40 per cent for cars used up to five years.
It means that customs officials assess the payable duties after deducting the depreciation from the total value of the item.
The price of reconditioned car decreases due to depreciation facility.
According to the Import Policy Order, the government allows import of the highest five years’ old car.
The government also wants to facilitate manufacturing of quality electronics items like mobile, computer, and motorcycle in the country.
In last year’s budget, the NBR allowed some benefits to the sector and this year the benefits would be extended.
The NBR may also set product-wise minimum value for import of many products instead of current country-origin minimum value.
It may also offers VAT exemption to some small industries like handmade biscuits, bread and plastic slipper.