Prices of imported used cars have gone up by Tk 1 lakh to Tk 4.5 lakh owing to cuts in duty benefit in the proposed budget for 2018-19, said dealers yesterday.
“We are shocked to see the measure,” said Habib Ullah Dawn, president of the Bangladesh Reconditioned Vehicles Importers & Dealers Association (Barvida), at a press conference at the National Press Club.
The association urged the government to revise the budgetary measure. The National Board of Revenue reduced the depreciation benefit, which is used to calculate the duty of imported used cars, by 5 percentage points.
For cars of one to two years old, the depreciation will be 10 percent from the incoming fiscal year, down from 15 percent in 2017-18.
For cars between two years to three years old, the depreciation will be 20 percent as opposed to 25 percent in the outgoing fiscal year.
Concession has also been cut by the same rate for older cars too.
Used cars, which have been imported for the last four decades, have become popular among the middle class who can't afford brand new ones, the Barvida said.
The latest measure will only increase the price burden on the middle-class buyers, Dawn said. “It appears that benefits are given to the rich.”
The association alleged that new vehicles are imported by paying lesser amounts of duty than those on the reconditioned cars.
This happens because the customs authority accepts the prices quoted by the new car importers, the Barvida said.
Used car importers, however, welcomed the cut in the supplementary duty for hybrid cars of 1600cc-1800cc to 20 percent from 45 percent in the outgoing fiscal year. This duty rate will be applicable for electric cars as well, said Finance Minister AMA Muhith in his budget speech on June 7.
Old car imports rose 34 percent year-on-year to 17,727 units in the first eight months of the fiscal year, according to data compiled by the association.
The Barvida though said the overall import of used vehicles would be lower this fiscal year from a year earlier.