Tax Exemptions Granted for E-Bike Production in the Budget

Business Report :

Tax exemptions have been granted in the budget for the production of e-bikes. The government has taken this initiative to support entrepreneurs in this sector in order to make fuel-efficient e-bikes more accessible. In the budget, all taxes exceeding 5% on local production have been waived. Additionally, all types of VAT, advance taxes, and supplementary duties have been exempted for the import and local purchase of components needed to manufacture e-bikes.
On June 2, Economic Adviser Salehuddin Ahmed announced the budget for the fiscal year 2025-26. In it, he proposed these tax exemptions to encourage e-bike production.
However, to avail of these benefits, investors must fulfill several conditions:
The manufacturer or investor must be registered with the Bangladesh Investment Development Authority (BIDA), the Bangladesh Economic Zones Authority, or the Bangladesh Hi-Tech Park Authority.
The manufacturer must obtain a Maker’s Code and Type Approval for e-bike (two-wheeler) production from the Bangladesh Road Transport Authority (BRTA).
The manufacturing company must possess the minimum required machinery for completing the process of producing metal housing or chassis, such as CNC tube benders, tube notchers, welding machines, hydraulic presses, plasma cutters or CNC laser cutters, and surface finishing machines within their own premises or factory. They must also have the capability to produce raw materials for these products.
Machinery for producing plastic components of e-bikes must be located within the factory premises.
There must be a paint shop and all painting processes must be conducted within the factory.
The manufacturer must produce the electric motor components.
The e-bike manufacturer must use batteries produced in-house or purchase them from a local producer with whom they have a formal agreement.
In addition to an ISO certificate, the manufacturer must obtain an environmental clearance certificate from the Department of Environment.
The factory must employ at least 250 personnel.
The manufacturer must ensure customer service by providing sales, spare parts, and after-sales support under their own management.