Vehicle ownership a bigger burden

In a stark contrast to the past few years, Finance Minister AHM Mustafa Kamal proposed 10 percent supplementary duty on issuance or renewal of all kinds of vehicle reg-istration, route permit, fitness certificates and ownership certificate—with exemptions for passenger buses, trucks, lorries, three wheelers, ambulances and school buses.

While past budget proposals saw sustained hikes in the import duty of both brand new and reconditioned vehicles—with a few concessions towards hybrid vehicles and local assembly of cars and motorcycles—this year's proposed budget is largely devoid of any major changes to the duty structure.

More concessions have been made for the motorcycle manufacturing industry in Bangladesh, however—in addition to the concessionary duties already in place for motorcycle assembly, 3 new raw materials have been added to the list, with a regulatory duty increase of 2 percent on the import of 16 inch tyres and tyre tubes for motorcycles, CNGs auto-rickshaws and light vehicles.

Increased cost of keeping a privately owned vehicle on the road has been offset by several changes to the infrastructure surrounding vehicle ownership—the finance minister held up four automated vehicle inspection centres in Dhaka, Chattogram, Rajshahi and Khulna divisions as examples, going on to say that these centres will be gradually ex-panded to 17 district headquarters as well.

Through a supplementary duty placed on vehicle ownership and documentation, the government has essentially expanded its potential revenue from the transport sector while deincentivising private ownership. This is largely in line with the growing number of newly registered vehicles on the road.

The number of registered motorised vehicles stands at 1,255,402 as of April 2018, in-creasing from 303,215 in 2003—a fourfold increase in just 15 years, according to the BRTA's records. More than 36 percent of all registered vehicles are in metropolitan Dhaka, from a total of 3,419,884 vehicles in Bangladesh according to the BRTA in 2018.

While the percentage of buses and minibuses remain almost same in this period, private vehicles—particularly, the number of cars and motorcycles—almost tripled. Public transport such as buses and minibuses has grown at a very insignificant rate even though the demand for public transport services is increasing. Motorcycles and cars constitute around 54 percent and 26 percent of total motorised vehicles respectively.