Reconditioned cars dearer by 200,000 taka after duty hike

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Munima Sultana
Reconditioned cars have become costlier by 200,000 taka on average after the government proposed a duty hike on their import in the budget for the upcoming fiscal year.
The dealers hiked the value of the cars although the ports are flooded with at least 10,000 sedans imported in the past few months when the tax rate was substantially low.
"As soon as the budget is announced, show rooms have raised the price of cars by 200,000 to 260,000 taka," said Biplab, a top car dealer.
In his budget speech, finance minister AMA Muhith spared small and fuel efficient cars from the tax hook, but he raised supplementary duty for other cars including the most popular ones from 30 per cent to 45 pc.
The announcement sent panic among the used cars traders with some warning that the new tax would drive willing buyers to new vehicles whose price got a fillip due to tax cuts.
Rogue traders, however, have gleefully cashed in on the situation as they raised prices of all the popular cars whose power vary between 1001cc to 1500cc.
"More than 90 per cent of the cars sold in the Bangladeshi market fall in these categories. They are also most popular because of high ccs but relatively low fuel consumption," said Samrat, another trader.
Car dealers at Kakrail said the high selling 1500 cc X Corolla - the most popular brand in Bangladesh - was trading at around Tk 1.30 million before the budget.
"It is now priced at nearly Tk1.5 million," said Samrat.
Prices of other Toyota cars including Probox, Allion, G-Corolla, Premio, X-Assista and X Fielder shot up by 200,000-260,000 taka.
Show rooms said cars having 1,500 plus cc have also increased as the proposed budget lowered depreciation from the present rate of 30 per cent to 25 pc.
Officials said the price hike has been "shamelessly" enforced despite the ports are swamped with at least 10,000 new cars imported in the past four months.
According to the customs authorities, these cars, making up nearly half of the country's annual sales, are now waiting at the stack yards of Chittagong and Mongla ports.
Although the importers have paid taxes of these cars under the old rates, they will be sold in the show rooms in Dhaka and Chittagong in line with the proposed rates.
Habibullah Dawn, president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), said the duty hike would affect reconditioned car sales.
"We hope the government would review the duty structure. It is the middle class who will pay the price due to the duty hike," he told the FE.
Dawn, however, denied that show rooms have raised prices of cars.