The Automobile Industry Development Policy 2021 offers tax and export incentives for entrepreneurs to set up automobile manufacturing plants in the country. It also offers zero duty for investors when importing capital machinery and equipment to make cars.
Additionally, manufacturers will also get duty free access for 4 years for importing auto parts. Under the policy, concessional loans will also be offered to manufacturers as stated by the industry ministry.
For exporting locally assembled cars manufacturers will receive a 15 per cent cash incentives. Furthermore, it will offer income tax incentives for consumers buying local manufactured automobiles.
The Bangladesh automobile sector is developing rapidly due to its adoption of new technology and efficient human resource management. The policy discourages importers to import completely built-up units of used vehicles as opposed to affordable locally assembled cars.
It also aims to attract necessary foreign and domestic investment where standards will be set keeping up with the local benchmarks. The policy will particularly focus on manufacturing parts and assembling factories for cost-efficient cars, three-wheelers, bus, trucks, tractors and ambulances.
The policy also offers guidelines for reconditioned car management, a 100 per cent duty and tax waiver for importing machinery for setting up CKD factories, a 1 per cent tax rebate for factories investing in the research and development (R&D) with 25 to 30 per cent tax incentive for importing parts and 10 per cent for importing local parts. Finally for EV manufacturers, a 10 year tax holiday will be provided.