"The rules should be more relaxed in Bangladesh."

Bangladesh importers scramble for older cars

DHAKA, June 17 (Reuters) - Bangladeshi car importers have urged the country's army-backed interim government to allow older vehicles in to keep them affordable to buyers, the head of the vehicle importers' association said on Sunday.

Currently they can import cars already used for four years. "But we urged the government to allow us bring in cars used for six years or more, which will lower costs by up to 40 percent," said Abdul Haque, president of Bangladesh Reconditioned Vehicles Importers and Dealers' Association.

He also urged the government to waive an up to 350 percent supplementary duty proposed on the import of microbuses, which comprise 15 percent of all used vehicles imported in Bangladesh every year.

The exorbitantly high tariff on microbus was proposed by the government's finance adviser Mirza Azizul Islam when he unveiled a $12.6 billion annual budget for 2007/08 fiscal earlier this month.

Islam, however, proposed to cut import duty on other used cars from 89 percent to 78 percent, which the importers felt was still high.

The high tariff, soaring fuel prices and an age cap on import of old cars would shrink the business and reduce the number of domestic buyers, Haque told Reuters.

He said he believed the government would reconsider their proposals before the new budget takes effect on July 1.

Microbuses are commonly used by offices, educational institutions and in social or family functions.

"If the proposed supplementary duty is implemented, the cost of a second-hand microbus will go up between 400,000 taka and 900,000 taka, depending on their size and brand," Haque said.

Previously, no supplementary duty was charged on microbuses.

"Now anyone would find it hard to afford a microbus, which would be among the costliest," Haque said.

He said even countries such as Britain, Australia, Saudi Arabia and Thailand allowed import of 12 to 18-year old cars, he said.

"The rules should be more relaxed in Bangladesh."

The government, struggling to boost revenue to cut dependence on foreign aid, so far has not responded to the car importers' pleas.

Some 200 Bangladeshi importers bring in 8,000 or more reconditioned vehicles every year. More than 90 percent of the cars on Bangladesh roads are Japanese, mostly Toyotas.

The cost of cars are generally too high in Bangladesh, where nearly half of its more than 140 million people still live on less than a dollar a day.

But things in the capital Dhaka are different from its other major cities. Traffic officials estimate more than 40,000 vehicles run in Dhaka, a city of 10 million, with 7,000 vehicles added every year. ($1 = 69.00 taka)