NBR starts probe into sharp rise in import
Shakhawat Hossain | Thursday, 12 June 2008
The revenue board has started probe into sharp rise in imports of reconditioned cars as the central bank expressed concern over the state of the country's balance of payment situation due to higher outflow of foreign exchange, said a senior official.
The finance ministry also sounded a note of concern over a jump in import of reconditioned vehicles from Japan by more than 18 per cent in the first 11 months of the outgoing fiscal.
"The higher number of cars import means higher payment obligation," said the national board of revenue (NBR) official, adding that it was not good news for the country's balance of payment situation.
Bangladesh Bank is under pressure to maintain a comfortable reserve requirement of around US$5.0 billion because of substantial increase in monthly import payment bill.
Due to price hike of food, fuel, fertiliser and other commodities in the international market the country's monthly import payment ranged between US$1.6 billion and $1.8 billion in the outgoing fiscal from previous $1.4 billion.
The NBR official said it is also part of revenue board's responsibility to find out as to why so many cars have been imported in an environment of economic sluggishness.
"It is irony that when the country's businessmen allege a slump in business activities they are resorting to import record number of cars," he said.
The official said primary investigation by the revenue board's central intelligence cell has revealed that new cars are being brought into the country in name of reconditioned cars.
"The businessmen are doing so by submitting false documents to get low duty benefit and make higher profit," he said.
The import duty of new cars is at least 50 per cent higher than that of reconditioned vehicles, but the retail value of new car is at least 100 per cent higher.
According to a leading car dealer, the country has a market of 4000 new cars annually with the government buying almost half of the number.
The market size of reconditioned vehicles varied in the past, but now it is growing as bank and financial institutions are providing loan to customers, he said.
The finance ministry also sounded a note of concern over a jump in import of reconditioned vehicles from Japan by more than 18 per cent in the first 11 months of the outgoing fiscal.
"The higher number of cars import means higher payment obligation," said the national board of revenue (NBR) official, adding that it was not good news for the country's balance of payment situation.
Bangladesh Bank is under pressure to maintain a comfortable reserve requirement of around US$5.0 billion because of substantial increase in monthly import payment bill.
Due to price hike of food, fuel, fertiliser and other commodities in the international market the country's monthly import payment ranged between US$1.6 billion and $1.8 billion in the outgoing fiscal from previous $1.4 billion.
The NBR official said it is also part of revenue board's responsibility to find out as to why so many cars have been imported in an environment of economic sluggishness.
"It is irony that when the country's businessmen allege a slump in business activities they are resorting to import record number of cars," he said.
The official said primary investigation by the revenue board's central intelligence cell has revealed that new cars are being brought into the country in name of reconditioned cars.
"The businessmen are doing so by submitting false documents to get low duty benefit and make higher profit," he said.
The import duty of new cars is at least 50 per cent higher than that of reconditioned vehicles, but the retail value of new car is at least 100 per cent higher.
According to a leading car dealer, the country has a market of 4000 new cars annually with the government buying almost half of the number.
The market size of reconditioned vehicles varied in the past, but now it is growing as bank and financial institutions are providing loan to customers, he said.