Bike registration fee cut on the way
The Bangladesh Road Transport Authority (BRTA) has proposed reducing the motorcycle registration fee for two slabs to 4.9 per cent and 8.4 per cent respectively to make the popular two-wheelers cheaper for users.
The fee slabs are based on motorcycle prices and engine capacities. One is for those of 100cc and below the average price of Tk 90,000. The other is for that above 100cc with Tk 2 lakh considered as the average price.
In Bangladesh, the motorcycle registration fee is a combination of charges for registering and inspecting the vehicle alongside a road tax with a two-year validity.
A public-private joint economic dialogue between Bangladesh and Japan on August 16 decided to bring down the cost of registration. The Prime Minister's Office then directed the BRTA to make recommendations.
The BRTA suggested reducing the cost of registering 100cc motorcycles to Tk 2,000 from Tk 4,200 and for those over 100cc to Tk 3,000 from Tk 5,600.
Though no changes have been brought to the inspection fee and the road tax, the BRTA recommended the latter's validity be extended to five years.
This means that the overall registration fee of 100cc motorcycles would decrease by 29 per cent to Tk 7,529 from Tk 10,589.
For those over 100cc, it is 27 per cent to Tk 9,852 from Tk 13,590.
The proposal is awaiting consent from the finance ministry, after which the new rate will come into effect.
Talking to The Daily Star, BRTA Chairman Nur Mohammad Mazumder said currently, the overall registration fee accounts for 22 per cent of the price of a motorcycle.
The BRTA aimed to bring down this amount to less than 10 per cent, he said. "We placed our proposal maintaining consistency with that in neighbouring countries," he said.
"The registration fee is not a major problem but paying the whole amount of road tax at a go is a burden for the consumers," said Hafizur Rahman Khan, chairman of Runner Group, a pioneer in motorcycle manufacturing in Bangladesh.
"The BRTA should collect the road tax gradually to ease the pressure on motorcycle users," he said.
He said the reduction proposal was better than nothing although the figures should have been much higher to benefit consumers and the industry.
However, Khan said, if the proposal comes into effect, it would ultimately have a positive impact on the industry along with motorcycle users.
Shah Muhammad Ashequr Rahman, head of finance and commercial of Bangladesh Honda Private, said it requested the BRTA to reconsider 125cc as the differentiating value for the two registration fee slabs, not 100cc.
The masses mostly use motorcycles of engine capacities of 125cc or below for their daily commutes, he reasoned.
"We also called for withdrawing the use of the retro-reflective number plates with RFID tags amounting to Tk 2,260 as it has not been implemented. Customers are paying for it without getting any benefit," he said.
The government did not address their demands in the proposed budget. It rather imposed an additional 10 per cent supplementary duty on the registration fee.
The Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA) requested a reduction of registration fees, road tax, supplementary duties and other charges by Tk 4,000 on an average.
The average registration cost is now Tk 22,000, which is about 25 per cent of the price of a 100cc motorcycle, the engine capacity that sells the most, they said.
Motorcycle sales leapt to about 5 lakh units in 2019 from 1.5 lakh in 2017 with the aid of duty reductions, increasing purchasing power and demand for mobility.
The industry had forecast growth of at least 20 per cent in FY2020, which has now become a far cry due to the pandemic.
The market began to expand fast from the fiscal year 2016-17 when the government slashed the supplementary duty by 25 percentage points to 20 per cent on the import of the two-wheelers' components to encourage domestic manufacturing.
The high hopes are said to have prompted market players to invest about Tk 8,000 crore, creating direct and indirect employment for around two lakh people.
The chairman of Runner Group said the new proposal would increase tax generation from the motorcycle sector as people would be more inclined towards abiding by the law and getting their motorcycles registered.
Khan said sales had increased significantly between July and September, which helped the sector cope with the lockdown-induced losses.
However, he said, sales fell slightly in October and the actual reason is yet to be known.
Regarding the road accidents involving motorbikes, industry people said the two-wheelers are not the reason for the mishaps. Rather, it occurs due to a lack of awareness about driving and safety.
Among the manufacturers, Honda's Japanese-certified instructors are providing training to customers at free of charge on safe driving.
Besides, the manufacturers organise safe driving campaign to create awareness among the users. The users usually become a victim of an accident due to reckless driving and breaches of traffic rules by the parties involved, particularly in urban areas.
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