Govt plans incentives for EVs, higher taxes on fossil-fuel cars
Total tax on EVs to drop from 93%; EV charger imports to become fully tax-free.
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 BNP government, under the leadership of Prime Minister Tarique Rahman, is set to be presented in parliament today at 3pm. Finance Minister Amir Khosru Mahmud Chowdhury will deliver the national budget.
Tax burden on EVs to fall
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According to National Board of Revenue sources, the current overall tax incidence on imported EVs is around 93%. The FY27 budget may propose reducing the tax to 64% for EVs valued at up to $25,000 and to 80% for those priced up to $50,000.
The proposal is likely to seek 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 may also come 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capacities of up to 2,000cc is set to be reduced, while the regulatory duty on new PHEVs of up to 1,800cc will be fully withdrawn.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 may fall from 93.16% to 73.44%. For brand-new PHEVs of up to 2,000cc, the tax incidence may 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 may propose 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 may also propose 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.
