As the use of electric vehicles (EVs) is increasingly becoming popular in the country, the government plans to bring EVs under the tax net in the budget for the next fiscal, 2021-22.
"We're actively considering bringing electric vehicles (EVs) under the tax net in the budget for FY22 due to the growing popularity of such vehicles," said a National Board of Revenue (NBR) official.
At present, the Bangladesh Road Transport Authority (BRTA) faces problems imposing Advance Income Tax (AIT) on the EVs due to absence of required provision in the existing finance act.
In the finance act, the AIT rates are fixed on the basis of engine capacities of the vehicles, known as CC (cubic centimeter), but the EVs do not have any engine. The motor capacity of EVs is measured in kilowatts, said the NBR official.
"We're working on it . . . EVs would be brought under the AIT net in the coming budget," they said.
Recently, the NBR received a letter from the BRTA which has requested the revenue authorities to amend the provision of the finance act regarding AIT on private cars.
According to the existing finance act, owners of private cars have to pay AIT at different rates, starting from Tk 25,000 to Tk 0.2 million.
Sources said the BTRA has already amended the Motor Vehicles Regulations 1984 to measure kilowatt equivalent to CC. One kilowatt of EV is considered equivalent to 20 CC.
The BRTA in its letter said that the NBR should amend the Finance Act-2020 to impose the AIT on EVs in line with the amendment to its regulations.
As per the existing rule, the BRTA collects the AIT from private vehicle owners at the time of renewal of fitness certificate.At present BRTA collects Tk 25,000 as AIT for vehicles with engine capacity up to 1500cc, Tk 50,000 for a car or jeep with engine capacity between 1500cc and 2000cc, Tk 75,000 for a car or jeep above 2000cc to 2500cc and Tk 125,000 for car between 2500cc and 3000cc.
Owners pay Tk 150,000 for a car or jeep between 3000cc and 3500cc and Tk 0.2 million for a car or jeep having engine capacity above 3500cc and Tk 30,000 for a microbus.
According to the Motor Vehicles Regulations 1984, EV means a vehicle powered exclusively by one or more electric motors whose traction energy is supplied by rechargeable battery installed in the vehicle, but does not include battery-operated bicycle or rickshaw.
In the letter, BRTA proposed to fix AIT 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 125,000 for a car with motor capacity exceeding 125kw but not exceeding 150kw.
The tax rate will be Tk 150,000 for a car with motor capacity exceeding 150kw but not exceeding 175kw and Tk 0.2 million for a car above 175kw motor capacity, the BRTA said.
BRTA has already taken steps to finalise the guidelines on registration and operation of EVs styled Electric Vehicle Registration and Operation Guidelines.