Demand for tax exemption to increase motorcycle sales
Motorcycle industry owners are in trouble for not giving tax exemption in the budget. And they claim that sales have halved due to the novel coronavirus. Those who are buying are also low income people. They are leaning towards motorcycles instead of public transport just to avoid infection. Analysts therefore advise tax exemptions to reduce the pressure of price increases on them.
As the demand continues to grow, 8 motorcycle factories have sprung up in the country. 6 of them are foreigners. Domestic and foreign investment in this sector is about 6 thousand crore. And employment of 5 lakh manpower. More than 5 lakh sold annually. Entrepreneurs aim to increase it to 10 lakhs as well as export.
In the current financial year, the manufacturers were getting VAT exemption on locally produced motorcycles and parts. But this facility was not maintained in the next financial year. So the price of motorcycles will increase. Entrepreneurs are fearing a loss in sales. According to them, the loss in this sector in the last two months due to the lockdown of Corona is Tk.
Sales of each motorcycle have halved in the Corona epidemic. Where previously 25 to 30 were sold per month, now it has come down to 5 to 10. Low-income people also say that they will not be able to buy if the price goes up even if they resort to motorcycles instead of public transport to prevent the transmission of corona.
As a personal vehicle, low-income people are the main buyers of motorcycles. Therefore, analysts are in favor of VAT exemption so as not to increase the pressure on them to increase prices. In order to keep the revenue target right, they are advised to stop tax evasion on motorcycle imports.
With the lifting of VAT exemption, the government aims to collect additional revenue of Tk 900 crore from the motorcycle sector in the next financial year.