New depreciation rates in the offing
FE Report | Tuesday, 26 August 2008
The National Board of Revenue (NBR) is set to fix 35 per cent and 40 per cent depreciation rates on import of 5-year and 6-year-old reconditioned vehicles.
The NBR has sent a proposal to the finance adviser on Monday for his approval to allow the depreciation rates for facilitating import of reconditioned cars, finance ministry sources said.
The NBR will issue an order after getting approval of the finance ministry as the decision was made after finalising budgetary measures for fiscal 2007-08, they said.
The government recently relaxed the rule for import of reconditioned vehicles by increasing the time limit to six years from four years allowed earlier. It has also withdrawn the restriction on import of up to 1649 cc cars. From now on, reconditioned vehicle importers will be able to import cars above 1649 cc.
The ministry of commerce through a statutory regulatory order (SRO) has amended the import policy order 2006-2009 to make reconditioned cars affordable to consumers.
The reconditioned cars grab almost 85 per cent of the total market share in the country.
In the current fiscal's budget, the NBR has changed the rate of depreciation of reconditioned vehicles.
It has introduced 5.0 per cent depreciation for 1-year old reconditioned vehicles, which was zero during the last two fiscals.
Depreciation rate for 2-year old vehicles is set at 10 per cent while 20 per cent for 3-year and 30 per cent for 4-year old ones.
Reconditioned vehicle importers have long been demanding relaxation of the import policy, which was also supported by the Bangladesh Road Transport Authority (BRTA) for the sake of environmental safety.
Cost of reconditioned cars of 2002-'03 models will be reduced by Tk 0.2 million to Tk 0.4 million in the country, a commerce ministry official said.
He also said quality cars will enter the country as the government has withdrawn the CC limit from this year.
In the outgoing fiscal, rate of depreciation is zero for one-year old vehicles while 10 per cent for two-year, 15 per cent for three-year and 20 per cent for four-year old ones.
Until 2002, a 50 per cent depreciation rate remained effective and then the government set it at 20 per cent for four-year-old cars and an embargo on import of cars more than four-year old was imposed.
Reconditioned car importers said diplomats have been enjoying 10 per cent depreciation per year. The rule should not be different for commercial importers, they added.
They demanded 10 per cent depreciation rate per year, that is, 60 per cent up to six-year old vehicles.
The NBR has sent a proposal to the finance adviser on Monday for his approval to allow the depreciation rates for facilitating import of reconditioned cars, finance ministry sources said.
The NBR will issue an order after getting approval of the finance ministry as the decision was made after finalising budgetary measures for fiscal 2007-08, they said.
The government recently relaxed the rule for import of reconditioned vehicles by increasing the time limit to six years from four years allowed earlier. It has also withdrawn the restriction on import of up to 1649 cc cars. From now on, reconditioned vehicle importers will be able to import cars above 1649 cc.
The ministry of commerce through a statutory regulatory order (SRO) has amended the import policy order 2006-2009 to make reconditioned cars affordable to consumers.
The reconditioned cars grab almost 85 per cent of the total market share in the country.
In the current fiscal's budget, the NBR has changed the rate of depreciation of reconditioned vehicles.
It has introduced 5.0 per cent depreciation for 1-year old reconditioned vehicles, which was zero during the last two fiscals.
Depreciation rate for 2-year old vehicles is set at 10 per cent while 20 per cent for 3-year and 30 per cent for 4-year old ones.
Reconditioned vehicle importers have long been demanding relaxation of the import policy, which was also supported by the Bangladesh Road Transport Authority (BRTA) for the sake of environmental safety.
Cost of reconditioned cars of 2002-'03 models will be reduced by Tk 0.2 million to Tk 0.4 million in the country, a commerce ministry official said.
He also said quality cars will enter the country as the government has withdrawn the CC limit from this year.
In the outgoing fiscal, rate of depreciation is zero for one-year old vehicles while 10 per cent for two-year, 15 per cent for three-year and 20 per cent for four-year old ones.
Until 2002, a 50 per cent depreciation rate remained effective and then the government set it at 20 per cent for four-year-old cars and an embargo on import of cars more than four-year old was imposed.
Reconditioned car importers said diplomats have been enjoying 10 per cent depreciation per year. The rule should not be different for commercial importers, they added.
They demanded 10 per cent depreciation rate per year, that is, 60 per cent up to six-year old vehicles.