The government has proposed significant tax and duty exemptions on the import of electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and charging infrastructure.
In contrast, taxes on some fossil fuel-based vehicles are proposed to be increased in the upcoming budget.
The National Board of Revenue (NBR) said the initiative has been taken to promote the use of environment-friendly vehicles.
Currently, the total tax burden on electric vehicles is around 93 percent. The proposal suggests reducing it to 64 percent for EVs priced up to 25,000 US dollars and to 80 percent for vehicles priced up to 50,000 US dollars.
In addition, a full exemption of duties and taxes has been proposed for electric buses used to transport students in educational institutions, while other electric buses and trucks will enjoy exemption from all duties except VAT until June 30, 2030.
Tax incentives have also been proposed for new plug-in hybrid electric vehicles (PHEVs). For vehicles with engine capacity up to 2,000cc, supplementary duty will be reduced, while regulatory duty on new PHEVs up to 1,800cc is proposed to be fully withdrawn.
As a result, the total tax burden on brand-new plug-in hybrid vehicles up to 1,800cc will fall from 93.16 percent to 73.437 percent. Similarly, the tax burden on brand-new PHEVs up to 2,000cc will drop from 132.36 percent to 96.10 percent.
The proposal also includes full exemption of duties and taxes on the import of chargers and charging stations, aiming to expand the electric vehicle charging network nationwide. Currently, the total tax burden on these products is 39.75 percent. If approved, it will fall to zero.
On the other hand, the tax burden on imported internal combustion (IC) engine vehicles with a capacity of 1,200cc to 1,600cc is proposed to be increased. The move aims to discourage the use of fossil fuel-powered vehicles that are harmful to the environment.
Currently, the total tax burden on these vehicles is 132.36 percent, which is proposed to be raised to 155.88 percent. However, tax rates on other categories of vehicles will remain unchanged.
Bd-Pratidin English/ AM
