FE Today Logo

Local car manufacturing to get fiscal support

NBR chief tells pre-budget meeting

FE Report | April 19, 2019 00:00:00

The National Board of Revenue (NBR) would provide necessary support to the investors who are interested in setting up of car manufacturing units in Bangladesh.

"Formulation of a policy is underway to encourage car manufacturing in the country," NBR Chairman Md Mosharraf Hossain Bhuiyan told a pre-budget meeting at the NBR headquarters in the city on Thursday.

Representatives from different associations of automobile assemblers and manufacturers, automobile workshops, automobile accessories, aviation operators, etc. placed their proposal ahead of upcoming budget for fiscal year 2019-20.

Expressing the hope that the investors would take the advantage of manufacturing automobile, the NBR chief said the policy will help start manufacturing of cars which will be sold with 'made in Bangladesh' tagline.

The motorcycle industry has grown in the country following the government incentives and tax benefits, he said, adding: the car manufacturers will also get such privileges.

He pointed out that a breakthrough in the motorcycle manufacturing and assembling sector has been made in the last five to ten years and now chances are there for the sector to explore export markets.

Mr. Bhuiyan said there are potential markets in several neighbouring countries. "The revenue authority eyes on facilitating export of motorcycle as its domestic market would reach saturation point in future."

Besides, he said, the NBR will request authorities concerned to cut registration cost for motorcycles.

Placing the pre-budget proposal, Aviation Operators Association Bangladesh (AOAB) Secretary General Mofizur Rahman demanded VAT and tax exemption on aviation fuel for the local airliners.

He also demanded tax waiver on helicopter transportation as currently there is a 20 per cent supplementary duty (SD) on the service.

The airliners also sought VAT exemption on import of aircraft engine accessories, aeronautical charges, landing and takeoff charges, and flying and aviation academy.

In response, the NBR chairman said the local aviation companies those operate both domestic and international flights are in trouble because of fuel price and uneven competition.

"If we don't assist them in time, it will be hard for the aviation operators to survive," he added.

Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA) demanded VAT waiver on locally sourced accessories for the motorbike manufacturers.

BAAMA secretary Abu Musabbir Ahmed mentioned that the annual sales of motorcycles increased to 450,000 units in 2018 from 300,000 units in 2016 while the market may grow by 10 per cent in the next fiscal.

Bangladesh Motor Parts Tyre Tube Merchants' Association urged the revenue authority to lower the customs duty on the products wheel rim bolt, excel bolt and crown bolt from 25 per cent to 15 per cent.

Bangladesh Ponno Paribahan Agency Malik Samity, a platform of commodity transporters, urged the NBR to abolish 7.5 per cent VAT on goods transportation.

"Instead, the government can impose trip and load capacity-based fixed VAT on transportation vehicles which will increase revenue collection by 100-fold from the sector," said the samity's president Abdur Rauf Humayan.

[email protected]

Share if you like