Staff Reporter :
Starting from July 1, metro rail passengers in Bangladesh will face a 15 percent VAT on their tickets as the existing waiver expires on June 30.
In response, the Bangladesh Passenger Welfare Association (BPWA) has demanded the withdrawal of this proposed VAT.
BPWA Secretary-General Mohammad Mojammel Hossain Choudhury issued a statement on Saturday urging the government to reconsider the tax.
He highlighted that the current metro rail fares in Bangladesh are significantly higher than those in neighboring countries.
“Due to the high cost of construction, the existing fare of metro rail in Bangladesh is several times higher compared to neighboring countries in Asia.
Although Bangladesh and India are relatively close in terms of average GDP, the fare is almost three to four times higher here. Compared to Pakistan, it’s more than 3 times,” Choudhury stated.
He added that metro travel is cheaper even in many European countries. Choudhury criticized the government for failing to ensure an improved environment and proper discipline in the capital’s public transportation system, forcing passengers to endure high travel costs.
“The high price of metro rail tickets deprives the general public, especially low-income people, of the convenience of using the metro rail,” Choudhury lamented.
He expressed concern that the proposed 15 percent VAT in the upcoming budget would further burden these passengers.
The BPWA’s call for the withdrawal of the VAT reflects widespread concern about the affordability of public transportation in Bangladesh.
The association emphasized the need for more affordable travel options to ensure that the metro rail system benefits all segments of society, especially the low-income population.
Mojammel Hossain Choudhury further said, “If this proposal is passed, the price of metro rail tickets will increase further. This will transform metro rail from a modern mode of public transport to a transport of the affluent. The government’s primary objective in launching metro rail will be lost.”
In such circumstances, the organisation demands the cancellation of the proposed imposition of 15 percent VAT on metro rail tickets in the proposed national budget.
During the budget speech, the Finance Minister Abul Hassan Mahmood Ali, however, did not make make any comment about extending the existing 15 per cent VAT waiver on the train tickets.
Currently the passengers are enjoying the VAT waiver, but it set to expire on 30 June.
Since the beginning of 2023, the National Board of Revenue (NBR) proposed to impose VAT on metro rail tickets.
Customs, Excise and VAT Commissionerate, Dhaka (South) Commissioner Showkat Ali on 22 January 2023 sent a letter to Dhaka Mass Transit Company Limited (DMTCL) calling for the imposition of VAT on metro rail tickets.
There were several meetings between NBR and metro rail authorities in this regard. Eventually, the NBR backed off from imposing VAT since the beginning.
But in May 2023, NBR issued a notification stating that 15 per cent VAT on metro rail tickets will be waived until June 2024.
Earlier on 19 May, Road Transport and Bridges Minister Obaidul Quader requested Prime Minister Sheikh Hasina to reconsider NBR’s decision to impose 15 percent VAT on metro rail services.
“Imposing 15 percent VAT on metro rail services is a wrong decision … Our neighbouring country has not imposed any VAT on metro rail services,” further stated.
In his budget speech, Finance Minister on Thursday said that metro rail has been introduced to reduce traffic congestion and improve the environment in Dhaka city and adjacent areas and the service will also provide a fast, pollution-free, time-saving, state-of-the-art urban transport.
On an average, 2,75,000 passengers travel by metro rail each day from Uttara to Matijheel. Since the introduction of metro-rail, the service has gained popularity, but many passengers expect that the fare should be reduced.
The additional imposition of 15 per cent VAT will be more burdensome for them and the low-income group of people and fixed-income group of people will fail to travel by it, they said.