MoL rejects proposal to impose 25pc duty

The law ministry has rejected a customs-authority proposal to impose 25-percent duty on cars imported by the members of parliament (MPs), who are now privileged to import it duty free, officials in the revenue administration said.
The National Board of Revenue (NBR) has initiated a proposal to scrap the duty-free provision in the upcoming budget under a plan to gradually phase out such benefits and forwarded it for the Ministry of Law (MoL) vetting.
The ministry argued that the proposal contradicts with an existing legal provision in this regard, said the officials.
Officials at the customs wing of the NBR said they would not, however, discard the plan and try to incorporate the provision in the budget as approved by the Prime Minister earlier to remove discriminatory measures in the fiscal policy.
"It may be done in the upcoming budget session of the national parliament which is scheduled to begin on June 5, 2024," said an official source.
Eminent jurist Dr Shahdeen Malik said it is not a difficult task to amend the provision or scrap the Statutory Regulatory Order (SRO) anytime if the government wants to do so.
There is no constitutional binding to offer such a privilege to the MPs under section 147 which ensures some privileges to the President, Prime Minister, Speaker or Deputy Speaker, Ministers, Ministers of State and Deputy Ministers, Judges of the Supreme Court, Comptroller and Auditor General, Election Commissioners and Members of Public Service Commission, he said.
Currently, the tax on import of cars ranges from 89 to 850 per cent based on the engine capacity.
But the Member of Parliament (Remuneration and Allowances) order, 1973, offers the privilege to the lawmakers to import duty- and tax-free vehicles regardless of their engine capacity.
Section 3C of the 1973 order says 'A Member shall be entitled to import free of customs duty, (value added tax), development surcharge and import permit fee during the whole of his term of office, one (car, jeep or microbus) of such specification, and on such conditions, as the government may specify in this behalf.
Under the order, a MP is entitled to import another new car, jeep or microbus after expiration of a period of five years from the date of his last import at the same terms and condition.
The provision of duty-free cars for MPs was introduced on May 24, 1987 during HM Ershad's rule.
In June 2007, the then caretaker government had repealed the duty-free benefit for the import of cars by lawmakers following detection of gross abuse of the privilege.
Later, the Awami League government reinstated it in 2009.
Currently, any decision regarding imposition or withdrawal of taxes is implemented by the NBR.
In the post-war context of the country in 1973, the facility has been offered under a different perspective which could be amended now, said an official.
The process of amending the provision is underway, which might help the customs authority implement the measure, he claimed.
Legal experts said that such undue benefits create uneven tax treatment in a country which hardly exists in other countries, except Sri Lanka.
In a gross estimate, the customs wing of the NBR has counted a tax loss of around Tk 51.47 billion in the last 15 years due to offering such a blanket tax-free facility to lawmakers.
According to customs data, lawmakers have imported 572 cars since 2009 - most of those are luxury heavy-duty vehicles such as Toyota Land Cruisers, Range Rovers, Mitsubishi Pajero.

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