Concern among riders and businesses over possible new tax on motorcycle owners

PNN News Desk: Dhaka

The government is considering imposing advance income tax on motorcycle owners in the upcoming national budget. According to sources at the National Board of Revenue (NBR), discussions are underway to set tax rates based on motorcycle engine capacity (cc).

Under the proposal, low-cc motorcycles may remain tax-free. However, motorcycles of 111–125 cc may face an annual tax of 2,000 taka, 126–165 cc motorcycles may face 5,000 taka, and motorcycles above 165 cc may face up to 10,000 taka in annual advance tax.

NBR officials say that higher-cc motorcycles are generally used by financially capable individuals, and the plan is to bring them under the tax net. However, the matter has not yet been finalized.

Meanwhile, concern has arisen among motorcycle riders, ride-sharing workers, and business stakeholders regarding the possible decision. They argue that not all motorcycle users are taxable income earners. Many students, delivery workers, and low-income individuals use motorcycles for daily necessities.

Currently, the tax-free income limit in the country is 350,000 taka annually. Income below this level is not subject to income tax. However, if advance tax is introduced, motorcycle owners may have to pay fixed amounts even without taxable income.

According to Bangladesh Motorcycle Assemblers and Manufacturers Association President Matiur Rahman, buyers already pay various taxes and fees during purchase and registration. He said additional advance tax would create pressure on both the industry and consumers.

He also added that motorcycle sales have recently declined. Despite investment encouraged by the government in local manufacturing, frequent policy changes are creating uncertainty among investors.

Industry data shows that there are currently around 5 million registered motorcycles in the country. Although significant investment has been made in local production since 2018, sales have declined in recent years.

Experts believe that NBR is increasingly relying on source and advance taxes as an easy method of revenue collection. However, imposing such taxes on people without taxable income could create social and economic pressure.

Former NBR official Syed Aminul Karim said that owners of expensive motorcycles may be taxed, but low-income earners should be treated differently.

Ride-sharing drivers in the capital have also expressed frustration, saying that it is already difficult to earn a livelihood, and additional taxes would make survival even harder.