Used cars become costlier

[bluesky]

12:00 AM, June 12, 2018 / LAST MODIFIED: 12:57 AM, June 12, 2018
Used cars become costlier
Star Business Report

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.

Star Business Report

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.

 

[TopCat]

Good new is hybrid cars will be cheaper..

 

[greenhawk]

As they should be. Less cars means less traffic. This should hopefully incentivize ride sharing services and rentals.

 

[bluesky]

Good new is hybrid cars will be cheaper..

As they should be. Less cars means less traffic. This should hopefully incentivize ride sharing services and rentals.

Your comments are generally acceptable. However, I think there are other ways to solve the issue of traffic jam in Dhaka. MRT lines will certainly help out. Also note that the tax collection system is very weak in BD. So, collection of tax and duty on the imported vehicles is a good source of money for the government exchequer. Less tax also means less money for development.

However, I will prefer car assembling plants within BD. This should be attained after the roads are expanded.

 

[DarkPrince]

We need AC buses in Dhaka not private cars. We do not have abundance of land.

 

[bluesky]

We need AC buses in Dhaka not private cars. We do not have abundance of land.

You are correct about AC bus when considered the traffic jungle in Dhaka. But, in this modern age when the population density is too high, the AC bus must be supplemented by MRT trains and private cars as well. Dhaka needs to improve the road system by providing many other smaller roads (artery) that will crisscross the main roads.

In Dhaka city, many jams at the road or rail crossings can be eliminated by, say, bringing down the XX road below the YY road. It is something like constructing multi storied buildings. These are built because land is small. Similarly, some of the main road cross sections can also be two tiered.

 

[UKBengali]

You are correct about AC bus when considered the traffic jungle in Dhaka. But, in this modern age when the population density is too high, the AC bus must be supplemented by MRT trains and private cars as well. Dhaka needs to improve the road system by providing many other smaller roads (artery) that will crisscross the main roads.

In Dhaka city, many jams at the road or rail crossings can be eliminated by, say, bringing down the XX road below the YY road. It is something like constructing multi storied buildings. These are built because land is small. Similarly, some of the main road cross sections can also be two tiered.

BD cannot afford mass consumption of private cars for space reasons and that is the reason that high import taxes are there.
Dhaka will get metro-rail/bus transport and that will more than suffice for the majority of people.
In the UK, London has a very good underground rail system and the five planned metro lines will cover Dhaka adequately.
BD needs to focus on public transport like railways, metro-rail, buses and coaches. Private cars are a bad idea in a densely populated country like BD.

 

[TopCat]

We need AC buses in Dhaka not private cars. We do not have abundance of land.

I want a bus free Dhaka.
All bus route should be converted to MRT. Rest of the road should be left to the private use.

BD cannot afford mass consumption of private cars for space reasons and that is the reason that high import taxes are there.
Dhaka will get metro-rail/bus transport and that will more than suffice for the majority of people.
In the UK, London has a very good underground rail system and the five planned metro lines will cover Dhaka adequately.
BD needs to focus on public transport like railways, metro-rail, buses and coaches. Private cars are a bad idea in a densely populated country like BD.

Per capita car is the lowest for BD. There are no private car outside Dhaka.

 

[bluesky]

BD cannot afford mass consumption of private cars for space reasons and that is the reason that high import taxes are there.
Dhaka will get metro-rail/bus transport and that will more than suffice for the majority of people.
In the UK, London has a very good underground rail system and the five planned metro lines will cover Dhaka adequately.
BD needs to focus on public transport like railways, metro-rail, buses and coaches. Private cars are a bad idea in a densely populated country like BD.

High taxes are there because the cars are imported ones. If Bd finally has its automotive industries the taxes will be lowered down. However, you are quite right to say the country cannot afford mass consumption of cars because it is densely populated. But, you are talking on the present context.

The situation can be changed if Dhaka is willing to build more flexible intersections and more road arteries. Moreover, a country cannot just stop cars, although the first preference should be MRTs and buses. I think, at least 70% of transport will be done by these two. But, still there will be many more cars along with the progress of cars.

I want a bus free Dhaka.
All bus route should be converted to MRT. Rest of the road should be left to the private use.

Bus service will always be there. It cannot be eliminated. Rather, bus service will supplement MRT services. For example, you get down in a MRT station and as we understand your appointed place may be a little distance away from the station. So, you take a bus rude to your place of appointment. People certainly cannot afford taxis all the time. I Believe, Rickshaws will be eliminated gradually by the time MRT and a modernized bus transport system are in place. How do you think of it?

 

[Nike]

High taxes are there because the cars are imported ones. If Bd finally has its automotive industries the taxes will be lowered down. However, you are quite right to say the country cannot afford mass consumption of cars because it is densely populated. But, you are talking on the present context.

The situation can be changed if Dhaka is willing to build more flexible intersections and more road arteries. Moreover, a country cannot just stop cars, although the first preference should be MRTs and buses. I think, at least 70% of transport will be done by these two. But, still there will be many more cars along with the progress of cars.


Bus service will always be there. It cannot be eliminated. Rather, bus service will supplement MRT services. For example, you get down in a MRT station and as we understand your appointed place may be a little distance away from the station. So, you take a bus rude to your place of appointment. People certainly cannot afford taxis all the time. I Believe, Rickshaws will be eliminated gradually by the time MRT and a modernized bus transport system are in place. How do you think of it?

Rickshaw can be banned outright by law, they can be replaced by online share ride application like uber, gojek or grab. The online apps share riding is much more humane and efficient. After i look closely, Bangladesh Dhaka MRT is much akin similarly to our elevated commuter rail line, not the subway systems we are currently built. Well its good for a while, but to safe space, subway systems is a must in limited space city like Dhaka.