The government is set to propose substantial tax and duty cuts on electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and charging infrastructure in the upcoming budget, while increasing the tax burden on certain fossil-fuel-powered vehicles to promote greener transport.
The first full budget from the government led by Prime Minister Tarique Rahman is scheduled to be presented in parliament tomorrow at 3pm. Finance Minister Amir Khosru Mahmud Chowdhury will deliver the national budget.
Tax burden on EVs to fall
According to National Board of Revenue sources, the current overall tax incidence on imported EVs is around 93%. The proposed budget will reduce the tax burden to 64% for EVs valued at up to $25,000 and to 80% for those priced up to $50,000.
The proposal also seeks to continue full duty and tax exemptions on imported electric buses used by schools, colleges, universities and similar educational institutions. For other electric buses and trucks, all duties and taxes except VAT will remain exempt until 30 June 2030.
Major relief for plug-in hybrids
Significant tax relief has also been proposed for new PHEVs. The supplementary duty on PHEVs with engine capacities of up to 2,000cc is set to be reduced, while the regulatory duty on new PHEVs of up to 1,800cc will be fully withdrawn.
As a result, the overall tax burden on brand-new PHEVs of up to 1,800cc will fall from 93.16% to 73.44%. For brand-new PHEVs of up to 2,000cc, the tax incidence will decline from 132.36% to 96.10%.
Charging equipment to get zero-duty facility
To support the expansion of EV charging networks nationwide, the government plans to remove all duties and taxes on imported chargers and charging stations. The current tax burden on these products stands at 39.75%.
If approved, the tax incidence on chargers and charging stations will fall to zero.
Higher taxes on petrol and diesel vehicles
Meanwhile, the government proposes increasing the tax burden on imported internal combustion engine vehicles with engine capacities between 1,200cc and 1,600cc. The overall tax incidence on these vehicles is expected to rise from 132.36% to 155.88%.
However, tax rates on other categories of vehicles are likely to remain unchanged
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