News Desk, Bangladesh Global: In a move that may lead to increased commuting costs for thousands of residents in the capital, the National Board of Revenue (NBR) is considering imposing a 15% value-added tax (VAT) on metro rail tickets starting from July. The proposal, if implemented, would mark the end of the VAT exemption period currently enjoyed by metro rail users, which is set to expire on June 30.
The NBR's decision to withdraw the VAT exemption facility on metro rail tickets aligns with directives from the International Monetary Fund (IMF), aimed at reducing various types of taxes.
Negotiations are underway between the NBR and relevant authorities, with further talks scheduled after Eid.
Presently, metro rail offers a vital respite from the notorious traffic congestion in the capital, with fares ranging from Tk 20 for short trips between stations to Tk 100 for longer journeys from Uttara to Motijheel.
However, if the VAT imposition comes into effect, commuters can expect a noticeable increase in ticket prices.
The imposition of VAT on metro fares has been a topic of contention for some time.
Since the beginning of 2023, the NBR has been pushing for this measure, citing the VAT Act which mandates a 15% VAT on air-conditioned railway tickets. Despite previous discussions and proposals to levy VAT on metro tickets, agreements have not been reached, leading to delays and reevaluation of the decision.
Metro rail, with its fully air-conditioned compartments and efficient service, has quickly become an indispensable mode of transportation for Dhaka's residents. Its popularity extends beyond office hours, with people relying on it for various daily commutes, contributing significantly to easing congestion on the roads.
The metro rail network, comprising 16 stations spanning from Uttara to Motijheel, was inaugurated in phases, with the full route expected to accommodate up to 60,000 passengers per hour.
The project, initially estimated at around 21 thousand crores, has seen cost escalations mainly due to additional construction works and the inclusion of new facilities, now totaling approximately 33 thousand 472 crores. Scheduled for completion by December 2025, the metro rail project signifies a significant investment in Dhaka's infrastructure aimed at improving urban mobility.
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