Reconditioned car importers have demanded reduction in supplementary duty (SD) on vehicles so that the use of vehicles increases to 'help the economy grow'.

“As vehicles are used in many economic activities, including agriculture and small business, we require a growth of over 25 per cent in car import to keep pace with the economic growth, ” Abdul Haque, president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), told a press conference in Dhaka yesterday.

“But since the government has proposed an excessive SD on car import it would reduce the import of vehicles,” Haque said, adding that the growth rate of car import is approximately 19 per cent till date in the current fiscal.

The Barvida chief proposed that the government fix 20 per cent SD on vehicles of up to 2000cc and 60 per cent SD on vehicles between 2,001cc - 3,000cc to reduce their costs.

In the proposed budget for the 2008-09 fiscal year (FY) the government has suggested 20 per cent SD on vehicles of up to 1500cc and 60 per cent SD on vehicles between 1,501 and 2,350cc.

The government also suggested 100 per cent SD on vehicles between 2,351cc and 3,500cc.

“As the government is proposing 100 per cent SD on small jeep of 2,400cc, it will discourage the import of these reconditioned vehicles and encourage importing new cars as in the new SD slab the costs of a 2,400cc reconditioned jeep and a new 2,000cc car are almost similar,” Haque argued.

He said as small and medium range jeeps are frequently used for business and commercial purposes, SD on vehicles between 2,001cc-3,000cc should be reduced.

The demand for keeping the present commission rate of 30 per cent intact for the dealers was also raised from the press meet. The sector people also sought readjustment of year-wise depreciation rates as 10,20,30 and 40 per cent on first, second, third and forth year respectively.