The Bangladeshi government is set to propose tax and duty reductions 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.

The first full budget of the BNP government, under the leadership of Prime Minister Tarique Rahman, is scheduled to be presented in Parliament today, June 10th, at 3 pm. Finance Minister Amir Khosru Mahmud Chowdhury will deliver the national budget.

Tax burden on EVs to be reduced

According to sources at the National Board of Revenue, the current overall tax incidence on imported EVs is approximately 93%. The FY27 budget may propose reducing the tax incidence to 64% for EVs valued at up to US$ 25,000 and to 80% for those priced at up to US$ 50,000.

The proposal is also expected to continue the full exemption from duties and taxes on imported electric buses used by schools, colleges, universities, and other educational institutions. For other electric buses and trucks, all duties and taxes, except VAT, will remain exempt until June 30th, 2030.

Tax changes for plug-in hybrids

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is set to be reduced, while the regulatory duty on new PHEVs with engine capacities of up to 1,800cc will be fully withdrawn. As a result, the overall tax burden on brand-new PHEVs with engine capacities of up to 1,800cc may decline from 93.16% to 73.44%. For brand-new PHEVs with engine capacities of up to 2,000cc, the tax incidence may fall from 132.36% to 96.10%.

Charging equipment

The government may also propose the removal of all duties and taxes on imported chargers and charging stations. The current tax incidence on these products stands at 39.75%. If approved, the tax burden 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 ranging from 1,200cc to 1,600cc. The overall tax incidence on these vehicles is expected to rise from 132.36% to 155.88%. However, tax rates for other categories of vehicles are expected to remain unchanged.