Reconditioned vehicle sellers seek Tk 500cr loan from stimulus package

Reconditioned vehicles traders are demanding Tk 500 crore from the government's stimulus package for industries and service sectors to cope with the economic fallout from the ongoing pandemic.

Announced in April, the Tk 72,750 crore allocation includes low-interest loans that would be provided by banks.

The vehicle importers and dealers say they had continued paying staff salaries and showroom rent amidst poor sales during the last two months of shutdowns, which led to losses of about Tk 300 crore.

"Automobiles are not daily essentials and we fear that the current scenario will continue for several months before sales regain their momentum," said Abdul Haque, president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), in a virtual press conference yesterday.

About 6,000 vehicles have been sold this fiscal year, whereas last fiscal year the figure had reached some 14,000.

Showrooms have been shut since March 26 and some Barvida members opened theirs on a limited scale from May 10, all to no avail as there is little to no customers, Haque said.

Barvida is a big source of revenue for the government and they pay thousands of crores of taka a year to the government exchequer in the form of tax, the association said in a statement yesterday.

About two-thirds of the value paid by a customer for a vehicle is essentially duties and taxes payable at the import stage. This revenue amounted to Tk 1,456 crore last fiscal year, he said.

The trade also contributes to the economy by generating value-added tax, road tax and registration fees, the Barvida president said.

Besides, each of Barvida's over 870 members pays their income tax and they have already invested around Tk 20,000 crore in the past 30 years.

By providing the sector Tk 500 crore in low-interest loan, the government exchequer would eventually be Tk 1,500 crore richer.

"We assure the government that the loan for reconditioned motor vehicle sector is 100 per cent safe. The money will be deposited in the bank against the vehicle document, and Barvida will provide a guarantee," he said.

According to Barvida, over 4,000 cars are on display in around 200 showrooms in Dhaka and Chattogram at present.

Besides, about 7,000 imported vehicles have been kept in the Mongla and Chattogram yards.

Barvida also requested the port authorities to reduce the rent for space at the yards from April to December, stating that otherwise, the sector would face severe losses.

The association also requested the National Board of Revenue to halt the auctions for unclaimed vehicles at ports for the period.

Mohammed Shahidul Islam, Barvida secretary general, and SM Anwar Sadat, vice-president, joined the press conference.