Automobile
Bangladesh Automobile Industry
- Reduced tax rate on export income: 5% for publicly-listed company and 10% for non-listed company (SRO-132-AIN/ 2013)
- 5% import duties on raw materials used for building ship in local market
- 10% export subsidy on export of ships (FE Circular-31, August 2017)
Overview
Bangladesh is one of the most promising markets for the expansion of four-wheeled automobiles. The number of annual registered automobiles has more than doubled since 2013, amounting to about 26,000 units for passenger vehicles and 37,000 units for commercial ones (excluding auto-rickshaw, human hauler) in 2019.
Although commercial vehicles are dominant, the growing purchasing power of middle-income population has spurred passenger vehicle registration. Due to steadily increasing per capita income as well increasing economic activity, the demand for both passenger and commercial vehicles is expected to grow at a rapid pace.
Automobile Policy 2020-Encourages local automobile assembly manufacturing
Annual market demand expected to cross 100,000 vehicles by 2024
SUV and Hybrid vehicles are the fastest growing segments
Bangladesh
Advantages of Bangladesh
Growth drivers
The demand for four wheeled vehicles is expected to continue growing rapidly in Bangladesh.
Assembling and manufacturing
The government is encouraging building of semi knocked down (SKD)/ completely knocked down (CKD) assembly/ manufacturing plants for commercial vehicles, passenger vehicle including EEV for domestic market in the country through the generous fiscal incentives and tax holidays.
In addition, the newly developed automobile policy 2020 proposes additional export subsidies along with tax benefits and concessional loan benefits to purchase locally assembled vehicles. Besides, the existing higher import duties associated with CBU import provide a ground for stable local production during the developing stage of the industry.
Parts/ components production
Manufacturing of parts and components is also one of the key agendas of the National Automobile Policy 2020. Generous tax holidays and fiscal incentives are provided to encourage the development of the segment.
Check incentives link : Sector specific
Location specific
Sector Specific Incentives and policies
Fiscal Incentives:
Income generated from automobiles (three and four-wheeler) made in Bangladesh will be exempted from tax for first 10 years of production and will enjoy reduced tax rate for the next 10 years
Automobile/automobile parts components manufacturing entities that are established between July 1, 2019 and June 30, 2024 are eligible for phased or partial tax exemption for 5 to 10 years depending on the location of their businesses.
Key Highlights of the Automobile policy 2020
For further details download full Policy:
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