A mistake that costs NBR Tk 200cr

The government has been deprived of substantial revenues due to duty-free entry of cars owned by tourists under two UN conventions Bangladesh has not signed up for.
The privilege, known as Carnet de Passage under two UN treaties, allows tourists to bring their vehicles to a country without payment of customs duties, provided the vehicles are taken back with the foreign nationals.
Since 1963, the revenue authorities have allowed in 245 cars, under the Carnet facility, according to officials of the National Board of Revenue.
Some 114 of these cars are yet to be sent back, denying the government revenues in the region of Tk 200 crore.
The fact that the country is not a signatory to the treaties means that it has no binding obligation to extend this privilege to foreign nationals and forgo revenues in the process.
However, to stem the damage, the NBR in April 2011 introduced a rule which stipulated that foreign nationals provide security deposits amounting to the duties and taxes of the imported cars.
To date, 315 cars have arrived at the country's ports seeking to get the Carnet advantage: 245 were released and 70 were held back for failure to provide bank guarantees.
“We have started to call auctions for the cars that were not received by the importers in exchange of the bank guarantee,” Md Masud Sadiq, a commissioner at Chittagong Customs House, told The Daily Star.
Of the 245 cars that were released, 131 have been taken back.
Most of the vehicles were brought in by the British-Bangladeshis hailing from Sylhet, on the basis of Carnet de Passage certificates issued by the UK-based RAC (Royal Automobile Club), Sadiq said.
The RAC issues the certificates against security deposits, redeemable once the cars are returned to the UK.
But one NBR official said those who have not taken their cars back demand return of their deposits from the RAC on grounds that the vehicles were damaged or stolen in Bangladesh.
The NBR officials said the cars not sent back are likely to be plying on the city roads.
In view of that, the tax administrator has asked the importers of the 114 vehicles to deposit the respective duties and taxes, Sadiq said. It has also decided to seek assistance from the related embassies, mainly the British High Commission, to realise the amount.
Also, the NBR has decided to take a firm decision to no longer entertain the Carnet facility. A letter was sent to the finance ministry in this regard, which the minister has approved, said the NBR official.
Other plans include alerting the communications ministry, and the Bangladesh Road Transport Authority refusing registration to the cars.