Motorbike registration fees to drop nearly 50%

The finance ministry has slashed the registration fees for motorbikes by nearly 50%. The registration fees for motorbikes up to 100cc has been cut from Tk4,200 to Tk2,000, while fees for bikes over 100cc has been reduced from Tk5,600 to Tk3,000.

The new registration fees will come into effect after the Road Transport and Highways Division issues a letter to the Bangladesh Road Transport Authority (BRTA) within the next few weeks, ministry officials told The Business Standard.

Commenting on the matter, TVS Auto Bangladesh's CEO and the General Secretary of Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA) Biplob Kumar Roy said, "It is a good start, and we thankfully appreciate the government initiative.

"Despite the fact that the Bangladesh Road Transport Authority (BRTA) is collecting the road tax in instalments, this fee is still very high. Moreover, digital number plates are costing people a lot."

Roy further said, "Even with the reduction, the buyer of a 100cc motorcycle would need more than Tk10,000 to ride it on roads, and that is more than double to that in our peer countries. For lifetime, the cost might go as high as four times compared to the neighboring countries.

"We would request the government to sufficiently rationalise the cost, which is very important to develop the market and local industry."

A buyer in Bangladesh spends nearly 22% of a motorbike's total price on paying the registration fees, road tax, getting a number plate and for other expenses. Meanwhile in India, such expenses reach around 5%-8% of a bike's cost.

Responding to a query, Bangladesh Honda Private Ltd's Managing Director and CEO Himihiko Katsuki said, "It is very much appreciated that the government considered our appeal to reduce the registration fees significantly for the country's people. 

"We believe it is the first step to reduce the registration fees compared to the neighboring countries, and also a symbol for implementing the Motorcycle Industry development policy 2018."

He also expressed appreciation for the initiatives taken by the Prime Minister Office, Japan Embassy, Ministry of Finance, Ministry of Industries, Ministry of Road, Transportation and Bridge, BRTA, all related legislative authority and BMAMA members.

Himihiko Katsuki added, "We strongly believe that with the government support, the motorcycle industry will contribute towards developing the industrialisation process and thereby provide people with an easy and reasonable day-to-day transportation facility. 

"Honda always serves people in expanding their daily life's potentiality with freedom of mobility to make people's lives better."

He continued, "We have always known that business success is not measured solely by our products, but also by our efforts to make the world better. With the same view, Bangladesh Honda was established to offer the highest-quality products at reasonable prices, while contributing to society by providing people with the joy and freedom of mobility.

"We already started manufacturing "Category 1" which means Frame and Swing Arm are being made from raw materials with the goal to provide motorcycles at a reasonable price to our beloved customers for their satisfaction. The reduction of registration fees will definitely satisfy our customers."

Bangladesh Honda Private Ltd's Head of Finance and Commercial Shah Muhammad Ashequr Rahman, FCA said, "We would like to express our sincere appreciation to the government for providing the highest facilitation by reducing the registration fees, this will support the development of motorcycle industry in Bangladesh. 

"We expect that other costs related to motorcycle registration fees will be reduced gradually, such as digital registration certificate, retro-reflective number plate with RFID Tag, inspection fees, 15% supplementary duty, road tax (for 10 years) and VAT."

Japanese investors had recommended dropping the motorbike registration fees and other related costs by 8% while attending a meeting on Bangladesh-Japan Private Joint Economic Dialogue (PPED) in August last year.

Principal Secretary to the Prime Minister Dr Ahmad Kaikaus had presided over that meeting. Besides, the BMAMA also proposed an 81% reduction in registration fees before and after the budget announcement last June.

In this regard, a letter signed by finance ministry's Deputy Secretary Sabbir Ahmed was sent to the Road Transport and Highways Division on 24 January this year, which responded positively to the division's earlier letter seeking to slash the registration fees for motorbikes.

The registration cost of a motorcycle, including the registration fee, road tax, supplementary duties and other charges, is about Tk22,000 on average, which is around 25% of the price of a 100cc motorcycle, the best-selling engine capacity. The association wants the fees to be fixed at Tk4,000.

At present, some 10 brands of motorcycles are manufactured or assembled in Bangladesh, namely Runner, Hero, Bajaj, Honda, TVS, Yamaha, Suzuki, Benelli, Zongshen and Lifan. The Honda Motor Company Ltd of Japan is jointly manufacturing motorcycles with Bangladesh Steel and Engineering Corporation in the Abdul Monem Economic Zone.

About Tk8,000 crore has so far been invested in this sector, which provides direct or indirect jobs to about two lakh people, according to the BMAMA.

The motorcycle industry contributes around Tk2,000 crore as duty, tax, and VAT directly every year. Besides, there is the opportunity for earning revenue of around Tk1,000 crore from registration fees.

Motorcycle sales had leapt to about 5 lakh units in 2019 from 1.5 lakh in 2017 because of a cut in import duties.