MPs' tax-free car import facility to continue

Members of parliament may continue to enjoy the duty-free vehicle import facility despite Finance Minister Abul Hassan Mahmood Ali's suggestion to revoke it in the proposed budget for the upcoming fiscal 2024-25, according to officials of the National Board of Revenue (NBR).

The officials suggest the facility of zero duties on capital machinery imports for investors in economic zones and hi-tech parks may also be retained along with tax holiday benefits – under certain conditions.

They on Tuesday said the newly imposed tax on capital gains in the stock market and the 15% tax option for whitening black money are likely to stay in the final budget.

The sources say NBR Chairman Abu Hena Md Rahmatul Muneem on Tuesday met Prime Minister Sheikh Hasina to discuss the issues. During the meeting, the prime minister provided specific directives.

Following the meeting, the NBR chairman convened a session with officials involved in budget matters at the Revenue Building in Agargaon and issued necessary instructions.

The finance bill is expected to be approved in parliament on 29 June.

A senior NBR official told The Business Standard on condition of anonymity, "The two major benefits of economic zones and hi-tech parks – tax holiday and zero duties on capital machinery imports – are likely to remain in place in the upcoming budget."

Another official said, "It is unlikely that the MPs' duty-free vehicle import facility will be revoked this time. The legal aspects regarding this matter will be reviewed later.

"Additionally, minor changes may be introduced in some other areas of the budget proposal."

While presenting the finance bill on 6 June, the finance minister proposed to revoke the duty-free vehicle import facility currently enjoyed by members of parliament.

In the budget speech, he stated, "Presently, all types of customs duties and taxes are exempted on the import of one car/jeep/microbus by MPs. We are encouraging everyone to pay taxes and move away from the culture of tax exemptions. A noble example will be set if public representatives amend this privilege and lead everyone to abandon the tax exemption culture."

"To achieve this goal, amendments to the relevant order can be made. I am requesting the concerned honourable minister to make necessary amendments in the 'Members of Parliament (Remuneration & Allowances) Order, 1973' accordingly," he added.

Following this, several members of parliament spoke out against the proposal in parliament. According to NBR sources, the proposal to cancel this facility will not be implemented in the FY25 budget.

Various types of vehicles are considered luxury goods in Bangladesh and are subject to a maximum of 500% supplementary duty depending on their engine capacity, and in some cases up to 800%, along with other duties and taxes, which regular car users must pay.

In contrast, MPs have been exempt from paying any customs duties on vehicle imports for a long time.