Cars become more costly to keep
In a scenario where the public transport sector cannot cater to the massive volume of commuters, owners of cars or jeeps will have to pay up to 67 percent more as advanced income tax or commonly known as "road tax" -- required to be paid during the registration and fitness renewal of motor vehicles.
Until this fiscal year, owners of cars or jeeps with up to 1,500cc engine capacity had to pay Tk 15,000, while those with up to 2,000cc engine capacity paid Tk 30,000.
The rates of taxes for these vehicles are going to increase to Tk 25,000 and Tk 50,000 respectively in the next fiscal year.
While the advance income tax on motor vehicles have increased across all categories of engines, the higher the engine capacity, the lesser the increase in tax.
A car or jeep with the engine capacity of 2,000-2,500cc will have to pay 50 percent more -- Tk 75,000. Similar vehicles with an engine capacity of 2,500-3,500cc will have to pay 25 percent more.
There is no increase at all on the engine capacities beyond 3,500cc. In addition, microbus owners will have to pay Tk 30,000 as tax, which 20,000 the previous fiscal.
Tax paid during registration and fitness renewal is non-refundable.
The Bangladesh Road Transport Authority (BRTA) collected Tk 1,005.75 crore as advance tax from vehicles in the fiscal 2018-19, according to its annual report.
This raise is worrisome for middle-class families with single family cars.
It comes at a time when the number of private car registrations has been falling since 2017. BRTA data shows that the number fell from 19,573 in 2017 to 16,319 in 2018, and 15,016 in 2019.
While the increase will amp up potential revenue from the transport sector, it will further disincentivise the private ownership, even as the public transport sector sees no particular improvement.
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