NBR set to revise depreciation rates for reconditioned cars

The National Board of Revenue (NBR) is set to revise the existing rates of depreciation for reconditioned cars.
The move is being considered after it found car importers are not being able to release cars aged up to one year from the port due to the faulty budgetary measure.
The Customs wing of the NBR is going to offer 15 per cent depreciation facility for six months to one- year old 1500 cc used cars.
The Board will split the depreciation facility for imported reconditioned cars aged between zero to six months and six months to one year.
There is no depreciation facility for one-year old cars in the fiscal measures of the budget for 2013-14 fiscal year. It was 35 per cent in the previous year.
However, the Board is going to reduce the deprecation facility by 5.0 per cent for used cars aged between one to two years.
Rates of other depreciation facilities will remain the same for three, four and five-year old cars.
In the budget, the government increased depreciation rates from 35 per cent to 45 per cent for 1500 cc cars.
As per the budget, 45 per cent depreciation has been set for 2008-09 model 1500cc cars while for 2010 model, it is at 40 per cent, for 2011 model at 35 per cent and 2012 model at 30 per cent.
With the changes, prices for 2011 model cars remain the same while it increased by around Tk 150,000 for 2012 model ones from the total value.
Earlier the traders got 35 per cent depreciation for all such cars.
A senior NBR official said the Board has received approval of the Finance Minister for changing the deprecation rates for used cars.
"We have sent the draft Statutory Regulatory Order (SRO) to the Law Ministry for vetting," he said.
Deprecation value of cars means conducting customs valuation of imported cars by deducting the said percentage of value of cars.
Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) president Md Habibullah Dawn said car importers have been demanding depreciation facilities for cars up to one year since the budgetary step for the current fiscal.
"We cannot release cars from ports as prices of one-year old cars will be the same like new cars without depreciation facility," he said.
Abdul Huq, director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and member of the BARVIDA said the change is still not friendly for car importers as they would not be able to get depreciation facility for cars up to one-and-half-year old.
"Customs rules stipulated that used cars would not be entitled to enjoy depreciation before 365 days of use. Now, six months have been added with one year under zero depreciation facility," he said.
Such changes in depreciation facility will be affecting the car business severely, he said.
As per data of the BARVIDA, the country had imported some 7000 used cars in FY 2012-13. The figures were 11,100 in FY 2011-12 and 19,823 in FY 2010-11.