Car import revenue can make a flyover/yr: Dawn

DHAKA: The new budget of the next fiscal is in the offing. Ahead of the budget the importers of reconditioned car are expressing their concerns in many possible ways. They are highly expecting that the government will reduce the existing 829 percent duty of imported reconditioned cars, which they term `single example in the world`.

Banglanews had an exclusive discussion with renowned reconditioned car trader, Managing Director of Auto Museum and former president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) Habib Ullah Dawn who lamented that ‘many car traders are on the streets becoming pauper during last two years.’

They are burdened with the unaccountable losses. Many of them are deeply engrossed with bank loan. Small investors could not sustain their business, Habib Ullah added.

Due to huge duty impose the cost of reconditioned cars has gone beyond middle class capacity and the car importers have accounted that about 60 percent business have gone out of their reaches.

It has gone beyond the purchase capacity of many a people due to imposition of 829 percent import tax on reconditioned cars in the budget of 2011-12, Habib Ullah Dawn said.

Some importers of brand new cars ‘dishonestly’ bring down the price of new cars through low-invoice that pushes the old car importers at stake.
 
They claimed that for this reason the government is losing revenue of more than Taka one thousand crore annually.

There is no instance of imposing 829 percent tax on car import throughout the world, Dawn said. He told that imposition of taxes should not be all, rather it must be calculated how much positivity would be the impact on the overall economy of the country.

Dawn asserted that ‘the government was deprived of huge revenue for imposing excess taxes on reconditioned cars’ and added that ‘we don’t like to see the repetition this year.’

The award winning car business maker, presenting a revenue pen-picture of last four years, informed that in 2008-2009 and 2009-2010 fiscal though the government earned a revenue of Tk 3000 crore each year, it sharply declined to almost half in 2010-11and 2011-12  fiscal year.
   
Does the government want to discourage this business by imposing excess taxes? Raising such a question Dawn said that many are not in a position of purchasing private cars.

Only few are purchasing at a high price. Citizen friendly government cannot take such decision, he said.

`Government cannot ensure public transport facilities, again people’s desire to have private cars is also being hampered,’ he added.

Habib Ullah dawn said that government’s decision of enhancing taxes can be termed as ‘cut off one’s head for headache’. The root causes of traffic jam on the roads are many—such as illegal encroachment of footpath, make-shift shops on the footpath, constructions occupying roads, free-will parking, loading and unloading of passengers on the roads. Without resolving these problems government has increased taxes of cars to bring down the number of vehicles. So, though there is necessity but people are not purchasing cars at a high price.’

Habib Ullah Dawn further told banglanews, ‘government cannot ensure sufficient public transports, cannot build sufficient number of flyovers-- if these are done more cars would have been required for Dhaka people.’ “The facilities of private cars cannot be compared to public buses,” asserted Dawn.

Putting the blame of dual and discriminatory policy adopted by the government, Dawn alleged that more facilities for the brand new car importers have been ensured who are depriving the government from due revenue through fake documents of low invoice.’

Habib Ullah alleged that about 30 to 40 percent less invoice is done on each car. He said that ‘an active syndicate is doing this practice for years together. Some dishonest exporters of exporting countries and some dishonest importers of Bangladesh are involved in the whole process.’

Habib Ullah disclosed that the price mentioned in the yellow book published by Japan Auto Apprisal Institute (JAAI) is the basis of tax fixation of reconditioned cars but there is no such acceptable basis for the brand new cars.

In case of new cars the declaration of the importers is accepted as the basis of fixing taxes where there is enough scope of foul play and fraudulence which is ignored by the government, Dawn said.

There are rules that the producer - selected importers will import and taxes will be fixed accordingly but the new car importers are not following the rules, Dawn alleged.

He said that the number of such qualified importers are few that has paved the way of importing cars through third company with government approval.

Habib Ullah told that the importers are befooling the government on this particular point that they are importing through a third company showing less price through low invoice resulting tax evasion helping them to market brand new cars at a cheaper rate.

These ill-practices are creating price gap affecting the reconditioned traders, Habib Ullah said.

He said that two years back 90 percent demand of cars were met by reconditioned cars importers while that percentage has come down to only 30 percent.

Habib Ullah Dawn said that, we demand a level-playing field from the government. We have already discussed the matter with the Finance Minister Abul Mal Abdul Muhith who being realised our definite and logical explanations, assured us for making adjustments.

We are waiting to see how the budget provisions are made on this matter and if things remain unchanged many car traders will have to leave the business while the purchasers of cars will be worst losers being deprived of owning a car.

The former BARVIDA chief also demanded revision of the tax segmentation of reconditioned cars on cylinder capacity (CC) basis in the budget of 2011-12 fiscal year. He said that 30 to 60 percent supplementary tax was imposed on microbus with variable CC which is very much illogical.

Habib Ullah opined that supplementary tax on microbus should be withdrawn as this vehicle along with commercial use, is used as ambulance, rent-e- car, school- bus and office- bus.

When the matter was brought to the notice of the Finance Minister he assured to consider it, Dawn said.
 
He told Banglanews that government should ensure that the ensuing budget will be people friendly, business friendly as well as revenue friendly.

In view of traffic congestion Habib Ullah said that if we can build a bigger number of flyovers and metro-rails there will be no jam in Dhaka. He further said only the annual revenue income of Taka 3000 crore from the car importer alone can help build flyover and government would not be required to take loan.

He said reconditioned cars from Japan are also environment friendly that would also help Dhaka as well as the whole country pollution free.

Habib Ullah Dawn has been playing an important role in meeting the demand of the people by importing reconditioned and brand new cars.

BDST: 1357 HRS, MAY 24, 2012