The National Board of Revenue (NBR) proposed a 25 per cent customs duty and 15 per cent value-added tax (VAT) on motor vehicles imported by lawmakers for the upcoming budget for FY2024-2025 and Prime Minister Sheikh Hasina has approved the proposal to reduce inequality by curtailing lawmakers' duty-free benefits.
However, according to the Members of Parliament (Remuneration and Allowances) Order, 1973 (President's Order), lawmakers are entitled to duty-free benefits on vehicle imports.
The law ministry has recently sent a letter to NBR Chairman Abu Hena Md Rahmatul Muneem, saying that NBR’s customs wing cannot impose any duty on vehicles imported by MPs due to the existing order.
Due to the legal issue, the proposal is not vetted by the law ministry, meaning the duty-free car import facility will remain unchanged in the upcoming days.
“A member shall be entitled to import free of customs duty, VAT, 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,” the order’s Article 3C reads.
It explains that in this Article, “Member” shall include the prime minister, the speaker, the ministers, the leader of the opposition, the deputy leader of the house, the deputy speaker, the chief whip, the deputy leader of the opposition, ministers of state, the whips, and deputy ministers who are Members of Parliament (MPs).
The order also states that a member shall be entitled to import another new car, jeep, or microbus after the expiration of a period of five years from the date of his last import under the same terms and conditions.
What facilities do MPs have?
According to a statutory regulatory order (SRO) signed by NBR Chairman Abu Hena Md Rahmatul Muneem in 2022, MPs are able to import a 2,000cc hybrid motor car or micro-bus, or up to a 4,500cc hybrid jeep, or one electric motor-run vehicle or other vehicles with only electric motor propulsion with duty-free concessions.
Under this SRO, MPs are enjoying vehicle imports, including fuel-run vehicles not more than 1,650cc; diesel fuel-run vehicles not more than 1,800cc; 2,000cc hybrid vehicles; 2,000cc fuel-run microbuses; 2,000cc fuel-run hybrid microbuses; 3,000cc jeeps; hybrid 3,000cc jeeps; fuel-run 4,500cc jeeps; and hybrid 4,500cc fuel-run jeeps.
This move is in addition to prior benefits allowing MPs to import duty-free 1,650cc petrol or gasoline-run motor vehicles, up to 1,800cc diesel-run motor vehicles, up to 2,000cc microbuses, up to 3,000cc petrol or gasoline-run jeeps, or 4,500cc diesel-run jeeps.
What do other citizens pay?
The government increased the supplementary duty on motor vehicles in FY23. The duty on the import of 2,001cc to 3,000cc cars was raised from 200 per cent to 250 per cent and on 3,001cc to 4,000cc cars from 350 per cent to 500 per cent, while the duty for cars over 4,000cc remained unchanged at 500 per cent.
Additionally, in the current fiscal year, the NBR introduced an environmental surcharge or carbon tax for multiple car owners. Under this move, the owner of a car with up to 1,500cc or 75kW engines is subject to pay Tk 25,000 as an environmental surcharge. The surcharge is doubled to Tk 50,000 for a car with an engine capacity of 1,501cc to 2,000cc or more than 75kW to 100kW.
Owners having a second car with a capacity of 2,001cc to 2,500cc or 101kW to 125kW will have to pay Tk 75,000. A surcharge of Tk 1.5 lakh is applicable for owners of multiple cars with a capacity of 2,501cc to 3,000cc or 125kW to 150kW, Tk 2 lakh for cars with engines over 3,000cc, and Tk 3.5 lakh for cars with 3,500cc or 175kW and above engine capacity.
