The government is set to abolish the long-standing duty-free vehicle import facility for Members of Parliament (MPs) in the upcoming national budget session, marking a significant shift in tax policy aimed at curbing privileges linked to public office.
Finance Minister Amir Khasru Mahmud Chowdhury said the decision reflects a broader commitment to transparency and equitable taxation, following years of criticism over abuse of the scheme and substantial revenue losses.
The controversial privilege, granted under the Members of Parliament (Remuneration and Allowances) Order, 1973, will be scrapped through necessary legal amendments, he told The Financial Express on Wednesday.
"We have taken the decision in the first parliamentary party meeting that none of us will avail such personal benefits associated with public office," he said.
The move follows growing criticism over misuse of the facility and significant revenue losses.
A national taskforce report on tax policy estimated that the government forewent around Tk 6.87 billion in revenue in the 2022-23 fiscal year due to the scheme.
The finance minister said there were multiple instances of abuse, including imports of luxury vehicles such as Rolls-Royce and Mercedes-Benz. "We want to stop such practices based on past experiences."
Although the facility remains in place under existing laws, the government plans to abolish it permanently through legislation.
"It will remain scrapped as long as we are in power," the minister said, adding that the decision also reflects the ruling party's stance.
The recommendation to withdraw the privilege also aligns with calls for ensuring equal treatment for all taxpayers.
Earlier, Jamaat-e-Islami had pledged during its election campaign that its MPs would not avail such benefits.
The issue had been widely debated during the previous Awami League tenure.
Although a proposal to discontinue the facility was made in the FY2024-25 budget by then finance minister Abul Hasan Mahmood Ali, it was not approved by Parliament amid resistance from lawmakers.
Under the existing provision, MPs are entitled to import one vehicle -- car, jeep or microbus -- free of customs duty, VAT, development surcharge and import permit fees during their term.
In contrast, regular importers face a cumulative tax burden that includes around 25 per cent import duty, 15 per cent VAT, 5 per cent advance tax, and supplementary duties ranging between 400 and 500 per cent.
The facility, introduced in 1987 during the Ershad regime, has long drawn criticism for enabling tax exemptions on high-end vehicles.
According to National Board of Revenue (NBR) data, lawmakers imported 572 vehicles under the scheme between January 2009 and April 15, 2024.
The total customs value of these vehicles stood at Tk 3.97 billion, while revenue concessions amounted to at least Tk 51.47 billion.
Following the fall of the previous government and the dissolution of the 12th Parliament, the NBR barred the release of around 30 duty-free imported vehicles.
These vehicles were later transferred to the government transport pool under the Ministry of Public Administration.
The total unpaid duties and taxes on these 30 vehicles amounted to Tk 2.69 billion, with each vehicle carrying tax liabilities ranging from Tk 86.2 million to Tk 94.4 million.
As the dues remained unpaid, the vehicles were sent for auction under Section 94(3) of the Customs Act, 2023, although the auctions failed to fetch expected prices.
Of the vehicles imported under the 12th Parliament, many were high-end models, with Toyota Land Cruisers making up a significant share.
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