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Importers demand 50pc depreciation for reconditioned cars
Star Business Report
Reconditioned vehicle importers and dealers yesterday urged the government to allow a 50 percent depreciation rate for imported six-year-old reconditioned cars.
Currently, the depreciation rate on both four-year and six-year old reconditioned vehicles is fixed at 30 percent, which Bangladesh Reconditioned Vehicle Importers and Dealers Association (BRVIDA) has termed unrealistic.
Depreciation is measured in an accounting method that is used to write off an asset's value over the period of its useful life. Depreciation lowers import duty on reconditioned cars.
At a press conference in Dhaka, the importers, however, welcomed the government's decision to allow import of up to six-year-old reconditioned vehicles.
In a statutory regulatory order (SRO) on August 6, the government approved the import of six-year-old reconditioned cars to make them affordable and reduce environmental pollution.
Previously, only four-year-old reconditioned vehicles could be imported into Bangladesh.
"Although the government is now allowing the import of six-year-old vehicles, it is saying that depreciation charges on the vehicles would not be as much as on the four-year-old vehicle, which is bizarre," said Abdul Haque, president of BRVIDA.
"The government gives 'depreciation allowances' for some reconditioned cars, while narrowing the-scope for some others," he said.
The reconditioned car importers said the government
should count the age of a reconditioned car from the manufacturing date inscribed on the vehicle's chassis.
At the press conference, the vehicle importers also urged the government to allow import of up to 10-year-old vehicles for special and commercialpurposes.
Bangladesh allows in only the cars of up to six years on environmental concerns. On the other hand, many countries including New Zealand, the UK and the Philippines have no such restrictions for importing reconditioned vehicles.
The importers also asked the government to fix import duty on old cars through preshipment inspection.
In the last financial year, the country imported around 12,000 reconditioned vehicles. The number is expected to cross 20,000 this year.