25pc import duty on the cards for MPs’ vehicles

The revenue authorities are planning to impose a 25 per cent import duty on cars imported by the members of parliament (MPs), withdrawing a more than three decade privilege of duty-free car importation. 

According to sources, the National Board of Revenue (NBR) will go for the import duty this time, while the other privileges, including waiver for supplementary duty and other taxes, will remain unchanged. The government is likely to pass the import duty proposal in the forthcoming budget. 

Currently, the parliamentarians are entitled to import cars without bearing any duty, a practice which has been in place for 36 years. However, it leads to a substantial loss of revenue for the government.

It was learned that the imposition of import duty is being considered due to the conditions set by the International Monetary Fund (IMF) for a $4.7 billion loan scheme.

However, the government earns the maximum in the form of supplementary duty in the process of vehicle imports, ranging from 45 per cent to 500 per cent depending on the particular vehicle’s engine capacity. It gave rise to a question as to how much the imposition of import duty only would help strengthen the revenue collection.

A supplementary duty is calculated as per the vehicle’s price and import duty. The parliamentarians would continue to enjoy significant facilities on car imports, even after implementation of the import duty. 

If the proposal is enacted, an MP importing a car valued at Tk 10 million (above 4000cc) would pay an import duty of Tk 2.5 million. In contrast, a general citizen importing the same vehicle would face an immensely higher cost, including 25 per cent import duty and 500 per cent supplementary duty, totaling at Tk 65 million. 

A senior NBR official told Prothom Alo that there was an initiative to impose the import duty on vehicles for MPs in the upcoming national budget. The revenue board adopted the policy to impose some duty for now, instead of withdrawing all privileges at a time. If the policymakers agree, it would revoke all the privileges on importing vehicles for the MPs. 

The facility of duty-free car importation was awarded to MPs during the government led by Hussain Muhammad Ershad on 24 May, 1988, and it was upheld by all the descending governments. Parliamentarians of all parties received benefits under the provision. 

In this regard, the executive director of Transparency International Bangladesh (TIB), Iftekharuzzaman, said the NBR proposal would reduce discrimination to some extent, though not fully. 

“The privilege of duty-free vehicles for MPs is unethical and unconstitutional. The privilege should be revoked outright amid this time of economic crisis, when there are discussions about cutting costs as well as enhancing the revenue collection,” he said. 

Also, he observed that the NBR is contemplating imposition of import duty only as it might have been hesitating to place the proposal boldly. The duty on vehicles should be equal for all.