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5% VAT on Uber, Pathao

  • Published at 06:07 pm June 7th, 2018

All ridesharing services will have to pay a VAT on their services from now on

Rides in the big cities are likely to get costlier, as the National Board of Revenue (NBR) has slapped a 5% value added tax (VAT) on ride-sharing service providers.

In a circular issued on Thursday, the NBR said the providers will have to pay a 5% VAT on their services.

Ridesharing services such as Uber, Pathao, Sohoz, FlitBD and SAM are operating in the major cities, particularly Dhaka and Chittagong. Over the last two to three years, they have become immensely popular.

Under the service, private companies and vehicle owners are allowed to run private vehicles, like cars, motorbikes, jeeps, microbuses and ambulances commercially. 

On November 22, 2016, US-based Uber Technologies Inc launched their ride sharing service in Dhaka for the first time in Bangladesh, only to be declared illegal by BRTA on November 26 of the same year as the company did not have permission from the regulatory body.

Number of users of Uber increased to 200,000 in Dhaka in November last year, within one year of its launch.

NBR Chairman Md Mosharraf Hossain Bhuiyan has on many occasions emphasized on bringing all companies under the tax net.