Bikers dodge registration for high fees

A section of bikers are not getting their motorcycles registered because of high registration fees, depriving the government of huge revenues.

As people can dodge registration in absence of monitoring, especially in rural areas, they go for smuggled bikes that cost less. The scope thus encourages smuggling from neighbouring countries.

Industry people said two-thirds of motorcycles sold in Bangladesh a year remain unregistered due to high fees.

On average, the registration fee for a motorcycle is around 18 percent of its price, while it is 3.5 percent for a car, they said.

Motorbike makers have urged the government to bring down the fee to 5 percent.

"If I buy a motorbike from the formal market, I will have to pay a huge sum of fees, as well as bribes, to get it registered," said a biker from a southern district. He bought a motorcycle around nine months ago and has been riding it without registration.

“Motorcycle is a growing industry. But high registration fees have dampened its prospects,” said Matiur Rahman, managing director of Uttara Group that sells Indian Bajaj brand.

Due to a rising demand, two Indian motorcycle brands are setting up plants in Bangladesh.

Uttara Group, Bajaj Auto's local assembler, will build a plant at a cost of Tk 150 crore within next year.

Hero MotoCorp, another Indian company, plans to set up its first-ever overseas manufacturing plant in Bangladesh by 2015, under a joint venture arrangement with the local Nitol Niloy Group. They will invest $40 million in five years.

In fiscal 2013-14, assemblers and manufacturers together sold around 2.5 lakh units of motorcycle, but only 86,360 units got registered with Bangladesh Road Transport Authority (BRTA), and brought  revenues worth Tk 176.75 crore for the government, said Rahman of Uttara Group.

Importers and assemblers have to pay taxes from 97 percent to 130 percent of the invoice price of a motorcycle.

Bangladesh has the highest motorbike registration fees compared to neighbouring countries, said Hafizur Rahman Khan, chairman of Runner Automobiles Ltd, a leading motorcycle maker.

The registration fee in India, Sri Lanka and Pakistan is around 2.5 percent of the price, he said. 

Low registration fees will increase the government's earnings in the long run and prevent smuggling as well, Khan said.

Around 50,000 bikes enter Bangladesh through illegal channels a year, causing a revenue loss of around Tk 450 crore, in terms of import duty and taxes, Rahman said. 

Md Zahidul Islam, deputy director of automobile department at Walton Hi-Tech Industries Ltd, another local motorcycle maker, said high fees are encouraging bikers to adopt illegal means.

BRTA Chairman Md Nazrul Islam said the motorbike manufacturers did not raise any complaint when the government increased the registration fees in January.

"They [the manufacturers] are now talking about high registration fees as the government is going tough on registration," he said.

suman.saha@thedailystar.net