Transport authority proposes tax on electric vehicles from next fiscal

The government is likely to bring electric vehicles (EVs) under the tax net in the budget for next fiscal year (FY) due to its growing popularities.

Currently, the Bangladesh Road Transport Authority (BRTA) cannot impose Advance Income Tax (AIT) on the EVs due to absence of required provision in the finance act.

In the existing finance act, the AIT rates are fixed on the basis of engine capacities of the vehicles, known as CC (cubic centimeter), but the EVs do not have any engine. The motor capacity of EVs is measured by kilowatt.

The tax officials said they would bring the EVs under the AIT net in the budget for FY 2021-22.

Recently, the BRTA has sent a letter to the National Board of Revenue (NBR), requesting it to amend the provision regarding AIT on private cars.

According to the finance act, owners of private cars have to pay AIT at different rates, starting from Tk 25,000 to Tk 0.2 million.

Official sources said the BTRA has already amended the Motor Vehicles Regulations 1984 to measure kilowatt equivalent to CC. One kilowatt of EV is considered equivalent to 20 CC.

The BRTA in its letter stated that the NBR should amend the Finance Act-2020 to impose the AIT on EVs in line with the amendment to its regulations.

The BRTA collects the AIT from private vehicle owners at the time of renewal of fitness certificate.

The amount of tax is Tk 25,000 for vehicles engine capacity up to 1500 CC, 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 125,000 for car between 2500cc and 3000cc.

Owners pay Tk 150,000 for a car or jeep between 3000cc and 3500cc and Tk 0.2 million for a car or jeep having engine capacity above 3500cc and Tk 30,000 for a microbus.

According to the Motor Vehicles Regulations 1984, 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.

In the letter, BRTA proposed to fix AIT 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 125,000 for a car with motor capacity exceeding 125kw but not exceeding 150kw.

The tax rate will be Tk 150,000 for a car with motor capacity exceeding 150kw but not exceeding 175kw and Tk 0.2 million for a car above 175kw motor capacity, it said.

BRTA has already moved to finalise the guidelines on registration and operation of EVs. The draft of the guidelines styled Electric Vehicle Registration and Operation Guidelines was framed in November 2018.

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