MPs may lose duty waiver for car imports

The National Board of Revenue seeks to impose 25 percent import duty on cars for lawmakers, reversing a practice of tax exemptions that amounted to Tk 5,147 crore over the last 15 years.

According to the NBR's import data, lawmakers imported 572 vehicles under the duty-free benefit between January 2009 and April 15 this year.

The customs value of the vehicles was estimated at Tk 397.38 crore, shows the data.

The NBR officials said the government gave tax waiver of at least Tk 5,147 crore for these vehicles under the facility.

They further said the NBR's proposal for withdrawal of the benefit will be placed at a meeting with Prime Minister Sheikh Hasina at her office today.

Import duty on the MPs' cars could be imposed in the budget for fiscal 2024-25 if the prime minister agrees to the proposal, they added.

Seeking anonymity, a NBR official said the proposal suggests replacing the waiver as part of efforts to improve Bangladesh's low tax-GDP ratio.

"According to the conditions of the International Monetary Fund, we cannot continue the duty-free benefit in the days to come."

Customs duty should be imposed on all types of products, except for 20-25 essentials such as rice, wheat and fertilizer, the official mentioned.

The NBR officials will present before the PM a summary of the facility under which the lawmakers received duty-free benefits of Tk 816 crore on car imports in fiscal 2022-23 and Tk 351 crore till March 30 in the current fiscal year.

"As per the proposal, 25 percent import duty, along with other taxes, will be imposed on the vehicles imported by lawmakers," he added.

The NBR data shows that of the 572 cars imported by the MPs since 2009, at least 563 were brought from Japan. They included Toyota Land Cruisers, Range Rovers, and Mitsubishi Pajeros. Most of these cars have engine capacity above 4.5 litres.

An importer has to pay 89 to 850 percent duty on a vehicle, depending on engine capacity.

Welcoming the NBR move, Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, said, "It's a timely and right step.

"I don't know if such a benefit is offered anywhere else in the world.

"We saw in the past that some MPs misused the facility… They sold their imported cars and bought new cars at lower prices.

"It [the duty-free benefit] should be immediately scrapped."

According to NBR officials, the duty-free facility was first given to MPs during HM Ershad's rule in 1987 to please them and keep them loyal to the regime. A notification in this regard was issued on May 24, 1988.

Later, the BNP and the Awami League maintained this facility upon assuming power.

Many members of the eighth parliament sold their luxury cars though the law didn't permit so within three years of purchase.

In the wake of gross abuse, the provision was scrapped during the last caretaker government's tenure through an ordinance in 2007.

However, it was reintroduced by the AL government in 2009.