The National Board of Revenue is going to relax the rules for importing cars that will be used for taxicabs.

The tax authority aims to reduce the lower threshold of engine capacity to l,485cc (cylinder capacity) from l,500cc for cars that will be used as taxicabs.

However, the duty privilege and upper threshold for importing cars for cabs will remain the same, said a senior official of NBR, seeking anonymity.

At present, taxicab operators get a reduced rate of 20 percent on import duty, including customs duty (CD), supplementary duty (SD) and regulatory duty (RD) to

import cars up to an engine capacity of 2,000cc.

The NBR gave the privilege in 2009 to lure investment into the sector and facilitate movement of commuters in major cities.

The tax authority is also set to increase the paid-up capital limit to Tk 2.5 crore for firms offering taxicab services. The paid-up capital threshold for cab companies was Tk 10 lakh previously.

"It will be beneficial for us," said Mustafa Kamal, chief executive of Toma Taxi Cab Services Ltd, a concern ofToma Group.

Taxicab operators usually import cars from Japan but they always get cars that are exactly l,500cc, as specified by NBR, he said.

Someumes, engine capacities become l,485cc or 1510 cc, he added. The NBR move comes in line with guidelines for taxicab services framed by the road transport ministry that says cars with l,485cc engine capacity should be treated as 1500cc.

The revenue administration is expected to issue a notification in this regard soon, the NBR official said.

Kamal of Toma Group said the spike in paid-up capital requirement might bar small investors from importing cars for the cab business.

Currently, two firms - Toma and Trust Transport Services of Army Welfare Trust - are engaged in providing taxicab services in major cities like Dhaka and Chittagong. The number of cars providing taxi services would be nearly300, he added.