As the whole world is gradually moving towards electric cars, we, here in Bangladesh, are lagging way behind. There are very few electric vehicles (EV) we see plying the streets of Dhaka; however, the number of hybrid vehicles have increased noticeably. There is a very good reason for that too, as the import duty on electric cars is a staggering 100 percent, something which is quite unheard of in the developed nations.
The yearly tax rate is also very unfavourable, as there are no proper tax brackets for these vehicles since they do not have an engine. Currently, the amount of AIT for a car or an SUV having an engine capacity of 1500cc is Tk50,000, for 2000cc to 2500cc it is Tk75,000, above 2500cc to 3000cc it is Tk1.25 lakh, Tk1.5 lakh for cars and SUVs over 3000cc to 3500cc. The yearly taxes go up to Tk2 lakhs for engine capacity over 3500cc. This makes the whole situation very complicated for BRTA to decide on the amount, as EVs are battery powered. Currently, BRTA cannot impose any AIT (Advance Income Tax) on these cars as there are no provisions in the financial act, as the AIT amounts are based on the size of the engine mentioned above. The tax officials said they would bring this under regulation and new rates might be introduced in the upcoming budget according to BRTA’s proposal.
After a six-month rigorous testing at BUET, they came up with a way to charge these battery-powered electric vehicles exorbitant amounts of yearly tax, as the power generated by these cars were compared to that of a conventional engine. This is quite an unfair measurement for these modern cars as, they are more efficient and does not put a dent on the environment as the traditional combustion engines do. This way, people will be heavily discouraged to purchase such vehicles, which is so important for controlling sound and air pollution across cities in Bangladesh.
A report by the Dhaka Tribune, back in 2018 stated how BARVIDA (Bangladesh Reconditioned Vehicles Importers and Dealers Association) made demands in a then pre-budget meeting with NBR to consider duty free import of electric vehicles for the sake of protecting the environment. As more and more people then would be encouraged to go for these instead of high fuel consuming cars. The authorities are seen to have done the opposite. One such example is a Tesla P100D, which has been registered as a car with an “engine” displacement of 5000cc. The absurd amounts of tax to be charged for that is likely to push people away from purchasing EVs while many countries around the world are doing the opposite by subsidizing the customers. India too have announced a new plan to provide such subsidies for hybrid and electric cars. Relevant Bangladesh government authorities should have an ambition to reach a certain target for the number of EVs and gradually replacing gas-guzzling combustion engines as much as possible.