BRTA urges NBR to impose AIT on electric vehicles

Jasim Uddin | Published: 22:05, Mar 13,2021


The Bangladesh Road Transport Authority has requested the National Board of Revenue to impose advance income tax on owners of electric vehicles to bring them under the tax net.

In a recent letter to Road Transport and Highways Division of the road transport and bridges ministry and the revenue board, the BRTA said that it would not be able to collect the tax from the vehicle owners due to technical complexities.

The revenue board imposes advance income tax on private car owners at various rates up to Tk 2 lakh a year depending on the engine capacity, known as cubic centimetre, of the vehicles.

Electric car does not have any engine and so its capacity cannot be measured in CC and the motor capacity of the vehicles is measured in kilowatt, the BRTA said in the letter.

As a result, it would not possible for the BRTA to impose the tax on electric vehicles, it said.

The BTRA has already amended the Motor Vehicles Regulations 1984, converting the measurement based on kilowatt into the measurement on CC.

As per the amendment, one kilowatt of electric vehicle is considered 20 CC.

The revenue board should amend the Finance Act-2020 to impose advance income tax on the owners of electric vehicles in line with the conversion, the BRTA said.

Currently, the owner of a car or jeep, having the engine capacity up to 1500cc, pays Tk 25,000 annually in advance income tax.

The BRTA collects the tax during the renewal of fitness certificate for the vehicle.

The amount of tax is Tk 50,000 for a car or jeep having the engine capacity between 1500cc and 2000cc, Tk 75,000 for a car or jeep above 2000cc to 2500cc and Tk 1.25 lakh for car between 2500cc and 3000cc.

Owners pay Tk 1.50 lakh for a car or jeep between 3000cc and 3500cc and Tk 2 lakh for a car or jeep having engine capacity above 3500cc and Tk 30,000 for a microbus.

According to the Motor Vehicles Regulations 1984, electric vehicle or EV means a vehicle powered exclusively by one or more electric motor whose traction energy is supplied by rechargeable battery installed in the vehicle, but does not include battery operated bicycle or rickshaw.

According to the BRTA proposal, advance income tax should be set at Tk 25,000 for an electric car with 75kw motor capacity, Tk 50,000 for a car with motor capacity exceeding 75kw but not exceeding 100kw, Tk 75,000 for a car with motor capacity exceeding 100kw but not exceeding 125kw, Tk 1.25 lakh a car with motor capacity exceeding 125kw but not exceeding 150kw.

The tax rate would be Tk 1.50 lakh for a car with motor capacity exceeding 150kw but not exceeding 175kw and Tk 2 lakh for a car with above 175kw motor capacity.

Officials of the revenue board said that they would bring electric vehicles under the tax net in the national budget for the upcoming fiscal year 2021-2022 in line with the BRTA proposal.

Bangladesh Reconditioned Vehicles Importers and Dealers Association president Abdul Haque on Friday told New Age that currently there were a very few electric cars in the country due to the absence of comprehensive policy and guidelines.

But the future of car market would be electric vehicles, he said.

BARVIDA has demanded a comprehensive policy addressing the issues related to customs duty and local manufacturing, he said.

There are more than 10 lakh battery-run three-wheelers, known as easy bikes, plying the streets without any regulations, he added.

Government officials said that the BRTA was now working to finalise guidelines on electric vehicle registration and operation.

The guidelines styled Electric Vehicle Registration and Operation Guidelines were drafted in November 2018.  

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