Barvida seeks rollback of proposed tax hike on mid-range reconditioned cars

The Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) has urged the government to withdraw the proposed increase in taxes on mid-range fossil fuel-powered reconditioned vehicles, warning that the move would significantly raise car prices for middle-income buyers while hurting investment and government revenue.

At a press conference held at the Samson H Chowdhury Centre of Dhaka Club today (20 June), Barvida President Abdul Haque also called for equal customs benefits for brand-new and reconditioned plug-in hybrid vehicles and similar policy support for hybrid cars.

According to Barvida, the proposed FY2026-27 budget replaces the existing 1-1500cc engine category with two new slabs – 1-1200cc and 1201-1600cc – raising the overall tax incidence on many popular fuel-efficient reconditioned vehicles from 132.36% to 159.80%.

The association estimates the changes would increase the price of a reconditioned Toyota Premio by around Tk3 lakh and a Toyota Axio by about Tk2.5 lakh, making car ownership more difficult for middle-income consumers. It warned that weaker demand could also discourage investment in the sector and ultimately reduce government revenue.

Barvida also criticised the proposed duty structure for plug-in hybrid vehicles, saying while the budget offers customs concessions for brand-new imports, reconditioned models will continue to face a 5% regulatory duty. It urged the government to apply the same supplementary and regulatory duty rates to both new and reconditioned plug-in hybrid vehicles, including microbuses.

The association further proposed reducing the supplementary duty on 2001-2025cc plug-in hybrid vehicles to 30% and extending similar tax incentives to conventional hybrid vehicles.

Barvida argued that although the government is encouraging electric vehicle imports through tax incentives, Bangladesh still lacks adequate charging infrastructure. Hybrid vehicles, on the other hand, already have an established servicing and maintenance network, making them a more practical option for promoting cleaner transport in the near term.

The association said the reconditioned vehicle sector has attracted around Tk20,000 crore in local investment, contributes about Tk6,000 crore in annual government revenue and supports several lakh jobs directly and indirectly.

The association also called for a rational long-term tax structure and the removal of customs valuation disparities, saying reconditioned vehicles currently face duties ranging from 159.80% to 1,007.50%, creating an uneven competitive environment.

Barvida Secretary General Reaz Rahman; Adviser Shahidul Islam; Vice-President Saifullah Samrat; former presidents Habib Ullah Don and Mannan Chowdhury Khosru, among other leaders of the association, were present at the conference.