Reconditioned car importers are in deep trouble as their sales have come down drastically this fiscal year due to the faulty tax structure and reduction in depreciation rate.
As a result, the government is incurring revenue loss from the sector, Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) said in a press conference in Dhaka today.
“Duty structure for reconditioned cars has been set in a way that pushes prices up for the cars more than the new ones,” Abdul Haque, president of the Barvida, said while addressing the press conference.
According to Barvida data, reconditioned cars have been imported only 3,438 units from July to November this year.
The data also said in FY 2018-19, a total of 12,502 units reconditioned car was imported while it was 23,075 units in FY 2017-18 and imports declined by 46 per cent year-on-year.
Haque said the import rate is declining continuously because of high duties, a fall in price depreciation, currency devaluation and higher bank interest rate.
Similarly, the sales of the reconditioned cars have gone down by 16.43 per cent year-on-year to 61 units per day in the last fiscal.
The government brought down the maximum depreciation of imported reconditioned vehicles to 35 per cent in FY 2018-19 from 45 per cent in FY 2015-16, increasing the import duty and the price of the car, Haque said.
Importers enjoy maximum 35 per cent depreciation on the brand-new price for four-year-old cars but it was 45 per cent just three years ago while there is no depreciation for a one-year-old car, Haque said.
He said the price difference between reconditioned and brand-new cars is very insignificant because of the reduction in depreciation rate.
Under these circumstances, importers are facing financial setback due to lower import and even the government depriving of revenue from the sector, he said.
He alleged the duty structure is creating disparities between reconditioned and brand-new car importers.
About the allegation of environmental issue, he said Japan export reconditioned car after testing carbon emission level and even Japan its self has a big market for a used car.
Barvida demanded a separate institute for examination in environment pollution by car as well as urged to impose a ban on old cars import to save the environment.