Govt to cut bike registration fee to below 10%

The government is considering reducing the motorcycle registration fee. The Prime Minister's Office (PMO) has directed the Road Transport and Highways Division to bring down the registration fee below 10% in consultation with the Finance Ministry.

Recently, Japanese investors at the Bangladesh-Japan Public Private Joint Economic Dialogue (PPED), demanded a reduction in motorcycle registration fees.

The PPED, held on August 16, was chaired by Ahmad Kaikaus, principal secretary to the prime minister.

The Road Transport Division will inform the PMO about the progress in this regard within the next seven days, reads the meeting minutes. 

After reviewing the existing motorcycle policy amendment, Japanese investors proposed reducing the motorcycle registration fee to 8%.

They said, motorcycle registration fee in Bangladesh is 22% of the price. In neighbouring countries, it is between 5-8%. Excessive registration costs are hindering the progress of the sector, and putting investors in unequal competition.

They say, the motorcycle sector in Bangladesh is still growing positively amid various hindrances including traffic jams and the risk of road accidents. Registration fees will have to be reduced to sustain this growth.

Before and after the budget announcement last June, the Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA) proposed an 81 percent reduction in registration fees.

The registration cost of a motorcycle, including registration fees, road tax, supplementary duties and other charges, is about Tk22,000 on average, which is about 25 percent of the price of a 100cc motorcycle, the best-selling engine capacity.

The association wants the fee to be fixed at Tk4,000.

Matiur Rahman, president of BMAMA and chairman of Uttara Motors, a sole distributor of Bajaj brand motorcycles of India, told The Business Standard that the motorcycle registration fee in Bangladesh is much higher than in neighbouring countries.

"We have been asking the government to reduce this fee for some time. It would not be possible for buyers to bear the registration fee at the existing level. It would have a final impact on the manufacturers. Investment and employment in the sector may reduce in this potential sector," he said. 

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 the sector, which provides direct or indirect jobs to about two lakh people, according to Rahman.

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.