Mass Rapid Transit (MRT) passengers may see nominal VAT (value-added tax) from next fiscal year as the government is going slow to avert any sudden pressure on their fares.
The revenue board has found the MRT as a potential new avenue of VAT collection as other modes of transport having air con are already under the purview of VAT.
As per the VAT law, MRT passengers will require paying VAT at a rate of 15 per cent on their ticket prices after the exemption expires on 30 June 2024.
According to a senior VAT official, the National Board of Revenue (NBR) may not become desperate to collect VAT initially considering popularity of the MRT.
However, a nominal rate below 10 per cent may be imposed in the budget if the NBR's proposal gets lawmakers' consent during budget preparation, he says.
Currently, VAT is imposed on AC buses, trains, launches and steamers, and ride-sharing services such as Uber and Pathao, adds the official.
According to a rough estimate, the government is likely to collect Tk 61.65 million in tax revenue from MRT ticket fares.
In a letter to the MRT authorities recently, the NBR expressed its inability to allow further exemption on MRT tickets.
The NBR offered VAT exemption to MRT passengers starting on 28 December 2022.
Earlier, the Dhaka Mass Transit Company Limited (DMTCL) requested the NBR to extend the period.
The second secretary of NBR's VAT division barrister Md Badruzzaman Munshi wrote to the DMTCL managing director in this regard.
On average, some 0.3-million passengers use the MRT route. The sales of MRT passes were recorded at more than 270,000 until 31 January 2024.
The MRT was launched in December 2022.
It has earned Tk 62 million in revenue from a total of 1.08-million passengers who travelled on the Uttara-Agargaon route within three months of its inauguration.
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