Ridesharing services come under tax, VAT net

Earnings from the ridesharing businesses may come under the purview of income tax in the next fiscal year (FY).

Owners of vehicles used in the ridesharing businesses have to pay tax at source at a rate of 3.0 per cent on their income up to Tk 2.5 million, according to the proposed Finance Bill-2018.

The Finance Bill was placed in parliament on Thursday.

The tax at source would be imposed at a rate of 4.0 per cent if their income exceeds Tk 2.5 million-mark, it said.

It also has been proposed that passengers availing the ridesharing services such as Uber and Pathao will have to pay 5.0 per cent Value Added Tax (VAT).

The proposed Finance Bill-2018 placed the new measure following its booming business.

The ridesharing companies will have to deposit the VAT to the public exchequer.

The motor vehicle owners involved in the ridesharing businesses have to submit income tax returns and obtain a 12-digit electronic taxpayer's identification number (e-TIN) on mandatory basis.

There are a number of ridesharing businesses in Dhaka and Chittagong.

Uber, Pathao, OBhai, OBon, Shohoj ride, Let's Go, Cholo, Fast Drive, Chal Dal are the popular ridesharing business entities in the country.

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