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The government has waived taxes on both purchase and lease of aircraft from American company Boeing - in a bid to ensure better negotiation with the Trump administration on reciprocal tariff.
The Finance Ordinance 2025 has waived the taxes, which the aviation sector insiders have welcomed as a positive step for the industry to flourish.
Kamrul Islam, General Manager of US-Bangla Airlines, said VAT was in the second and third layers on lease of Boeing aircraft, which has been waived, but some taxes are hindering growth of the aviation sector.
"We need to import spare parts frequently, which are subject to taxes."
Mr Kamrul opined that the aviation sector has been less prioritised in the budget, as its total allocations have been cut to Tk 24.55 billion for next FY - from Tk 47.87 billion in the revised budget this year.
Some pending issues, including improving runway infrastructure, making Cox's Bazar and Saidpur airports vibrant in line with the international standards, would require higher allocation, he added.
Managing Director of Novoair Mofidur Rahman said the waiver of 15 per cent VAT would help the industry to lease aircraft at cheaper rates.
Already, purchase of new Boeing aircraft is exempted from payment of VAT, while lease is subject to pay 15 per cent VAT.
As most of the airline companies take aircraft on lease, instead of buying, the VAT waiver on Boeing purchase has been unutilised for years.
The Novo Air MD hailed the decision on budget cut, pointing at huge unnecessary expenditure that took place in the previous times by wasting public money.
Biman Bangladesh Airlines currently operates a fleet of 21 aircraft, 16 of which are Boeing. These include four Boeing 777-300ER, four Boeing 787-8, two Boeing 787-9, and six Boeing 737 aircraft. The remaining five aircraft in the fleet are Dash 8-400s.
US-Bangla also has Boeing in its fleet, while Novoair is yet to add Boeing to its fleet.
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