DMTCL Rejects NBR's VAT Proposal On Metro Rail Tickets

The deadline for the 15% Value Added Tax (VAT) exemption on metro rail tickets is going to expire on 30 June this year. The National Board of Revenue (NBR) remains firm in its stance against extending the exemption period after the period. However, the Dhaka Mass Transit Company Limited (DMTCL), the entity operating the metro rail, is advocating for an extension of the exemption period.

Under the current VAT Act, any air-conditioned railway ticket is subjected to a 15% VAT. Moreover, the International Monetary Fund (IMF) has advised the government against granting any type of tax exemption.

Currently, metro rail is the most popular public transport for city commuters. The government is under pressure to bolster revenue streams from this sector, prompting the NBR's reluctance to extend tax exemptions on metro rail tickets.

According to a source at the Board of Revenue, a meeting was held between senior officials of the NBR and the metro rail authority DMTCL regarding the imposition of VAT in February this year. At that meeting, it was proposed to impose 15% VAT on tickets. But DMTCL did not agree to that proposal.

It is known that the DMTCL formally communicated with the NBR Chairman through a letter, arguing against the imposition of VAT on metro rail tickets.

In this regard, company secretary and director, DMTCL, Abdur Rauf told the newsmen that while the law mandates a 15% VAT on air-conditioned railway tickets, Metrorail only offers air-conditioned class without any alternative. Therefore, passengers are compelled to purchase the same ticket, as there is no differentiation based on class.

Additionally, with metro rail now has become a public transport, Rauf emphasized the necessity of reconsidering the VAT imposition.

Meanwhile, sources at the NBR indicate that a decision regarding the imposition of VAT on metro rail tickets will be made after Eid-ul-Fitr.