Proposed budget 2017-18: How does it affect your car buying?
Every time the Finance Minister prepares to announce a budget, the country goes into a frenzy, stocking up on chewing gum and fresh air in case the supplementary duties on imported gum and non-polluted Nepalese air goes up by 6000%. It's generally a time of dread for even the most cautious of optimists – and FY2017-18 is no different.
While there are reservations elsewhere in the budget that will cripple the middle class and discourage savings (what logic dictates discouraging saving in a developing nation?), we won't be going into all that because someone with a lot more experience has, no doubt, already ripped into the proposed budget which AMA Muhith has declared to be "the best budget ever". Instead, we'll focus on how the proposed budget affects the transportation sector.
The proposed budget for FY2017-18 has not increased the supplementary duty placed on cars – in fact, the major changes have been reductions in the SD. The major change comes in the slab for hybrid vehicles – hybrid vehicles with petrol engines ranging from 1600cc to 2000cc gets 45% SD (down from 60%), 2000cc to 3000cc gets 60% SD (down from 150%), 3000cc to 4000cc gets 100% (down from 300%) and those exceeding 4000cc gets 300% supplementary duty (down from 500%). This softening of attitude towards hybrid vehicles is apparently supposed to encourage the import of more environmentally friendly vehicles, which goes in line with the government's mandate for reducing carbon emissions. Obviously, when it comes to charging your environmentally friendly plug-in hybrid, feel free to be morally ambiguous about the coal-fired power plants that the government is building for you.
We talked to Avik Anwar, director of Car House Limited, one of the oldest reconditioned vehicle importers in the country, about his take on the proposed budget. "The current fiscal budget of the year 2017-2018 opened a lot of prospects and closed a lot as well. We solely rely on selling regular vehicles such as Axio, Premio, Noah, etc. The depreciation structure change has led to a significant increase in the price of these vehicles but it has also allowed hybrids to come in so it's an interesting budget which is yet to play out its kinks and benefits. Primarily low income to middle income families will suffer as these vehicles have gone up in pricing but if they switch to hybrid vehicles these can be offset."
Overall, the proposed budget allocates 26.8% of the total budget to the Transport sector – excluding the budget allotted to the Ministry of Railways, the Road Transport and Highways Division as well as the Bridge Division gets 25.224 crore Taka for FY2017-18. Considering that fund was 4,390 crore Taka for FY2012-13, that is a huge increase – approximately a 470% increase, discounting the cost of inflation.
Here's a visual run-down of how the 2017-18 budget will affect you.
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