Metro rail passengers will have to bear additional cost as the National Board of Revenue (NBR) is going to impose 15 percent VAT on its tickets from July 1.
There is currently a VAT waiver on Metrorail tickets, which will expire on June 30. DMTCL requested NBR to extend the period but the revenue board expressed unwillingness to extend the exemption period.
The second secretary of NBR's VAT Division Barrister Md. Badruzzaman Munshi sent a letter to the managing director of Dhaka Mass Transit Company Limited (DMTCL) in this regard.
According to the letter, VAT exemption on metro rail tickets will expire on June 30.
In the letter, the revenue board said that various development activities are going on in the country with the goal of attaining the status of developed country by 2041.
The government has to constantly provide money to carry out those development activities, which is mainly collected through direct and indirect taxes.
Tax exemptions are given to various sectors on different occasion with the aim of promoting domestic industries, reduce import dependence and developing small and cottage industries, etc, said the letter.
That is why tax exemption benefits are being gradually withdrawn from various sectors.
Besides, freedom fighters and children of three feet height can travel free of charge, and people with special needs can travel on metro rail at a 10 to 15 percent discount.
Meanwhile, the metro rail authorities on Thursday said they will ask the NBR to reconsider its decision to impose 15 percent
VAT on metro rail fare from July 1.
"We will try our best to halt the decision. There is still some time, so we will go to the highest level in this regard," Mohammad Abdur Rouf, company secretary of Dhaka Mass Transit Company Ltd (DMTCL), the operating agency of metro rail, said.
Mohammad Abdur Rouf said they were yet to formally receive NBR's letter but heard about it.
He said NBR last year proposed to lift the exemption but deferred it
following DMTCL's request.
When NBR gave the same proposal this year again, they once again requested them not to impose VAT as it would have impact on passenger fair, he said.
He said metro rail is public transport and people of all walks of life use it. So, it would not be fair to impose VAT only because metro rail is an air-conditioned service, he said.
In case of conventional trains, people have the option to use non-AC seats, but the air-conditioning is built into the metro rail service, he added.
"So, we are still opposing the decision and we will try our best to halt the decision," he added.
The country's first metro rail service was opened to public partially in December 2022 and fully from September last year.
Around 2.95 lakh passengers used the trains daily before Ramadan and earned around Tk 1.5 crore daily.
The fair from Uttara to Motijheel is Tk 100 and minimum fare is Tk 20.