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Importers of used hybrid cars may get duty benefits

Sohel Parvez
The government is likely to extend duty incentives to importers of reconditioned hybrid cars in a bid to encourage the use of fuel-efficient and environment-friendly vehicles, according to insiders.
The development came at a meeting yesterday between Finance Minister AMA Muhith and representatives of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
At present, new hybrid cars are met with a 61 percent duty, which is much lower than nonhybrid cars. Importers now want the same benefits for the import of used hybrid cars as well.
"The demand for hybrid cars is yet to pick up because of high prices. We have sought duty benefits for imports of old hybrid cars in line with what the new cars get, as it will make hybrid cars more affordable," said Barvida President Md Habib Ullah Dawn.
He cited the Toyota Camry hybrid car as an example: a new vehicle costs Tk 75 lakh but if the duty benefit is extended to reconditioned versions as well, it would be possible to offer the vehicle atTk 45 lakh.
It will increase the government's revenue, cut fuel
demand and help protect envi-ronmental pollution, the Barvida president added.
The car importers also called for revision of the duty structure for reconditioned non-hybrid models. At present, the duty structure is split into six categories according to the size of engines, and there is a huge jump in duty for cars upwards of l,500cc, Dawn said.
For import of reconditioned cars up to l,500cc, the duty is 132 percent, which rises to 218 percent for cars in the l,501cc-l,750cc range and 296 percent for cars in the l,751cc-2,000cc range.
"As a result, all of us rush to take part in the auction of cars
having l,500cc, which brings about a price spike."
Subsequently, Barvida recommended merging the l,501cc-l,750cc and l,751cc-2,000cc categories.
"The revision in slabs and supplementary duty will increase our choices and thus reduce competition among us to import reconditioned cars having l,500cc. This will also facilitate the fall in prices of cars in this range."
Dawn expects the prices of vehicles to drop by Tk 2-3 lakh each if the government revises the categories and gives reconditioned hybrid cars the same duty benefits as the new ones.