The National Board of Revenue (NBR) has been requested by the Bangladesh Road Transport Authority (BRTA) so that advance income tax can be imposed on owners of electric vehicle to bring them under the tax net.
The BRTA, in a recent letter to the Road Transport and Highways Division of the road transport and the bridges ministry and the revenue board, stated that it would not be able to collect taxes from the owners of the vehicles because of technical difficulties.
The revenue board has imposed advanced income tax on private car owners at different rates which could amount to Tk 2 lakh per year depending on the engine capacity, known as cubic centimeters, of the vehicles. The BRTA said in the letter that the electric car does not have any engine and so its capacity cannot be measured in CC and the motor capacity of the vehicles as measured in kilowatt. Therefore, it would not be possible for the BRTA to impose the tax on electric vehicles.
The BTRA has already amended the Motor Vehicles Regulations 1984, converting the measurement based on kilowatt into the measurement of CC. As per the amendment, one kilowatt of electric vehicles is considered 20 CC. The BRTA said that 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.
In the current time, an owner of a car or jeep, having the engine capacity up to 1500 cc, pays around Tk 25,000 annually in advance income tax. The tax is collected by BRTA 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 a 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.
Based on the Motor Vehicles Regulations 1984, an electric vehicle or EV means a vehicle powered exclusively by one or more electric motor whose traction energy is supplied by a battery which is rechargeable inside the vehicle, but which does not include any battery operated bicycle or rickshaw.
Based on the proposal of the BRTA, 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.
In line with the proposal, officials from the revenue board has stated that they are planning to bring electric vehicles under the tax net in the national budget for the fiscal year of 2021-22.
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 the car market would be electric vehicles, he said. He also stated that BARVIDA has demanded a comprehensive policy in addressing the issues related to customs duty and local manufacturing.
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.