In the second week of April, the National Board of Revenue (NBR) expressed its intention to impose a 15% VAT on metro rail tickets starting from July 1. This announcement has sparked a dispute among the country's top local ministers and bureaucrats. The Road Transport and Bridges Minister, Obaidul Quader, has taken a firm stance on the issue, leading to heightened conflict between bureaucrats and politicians. The matter has now escalated to the Prime Minister.

Sources indicate that the Prime Minister might make a final decision on this matter. However, as of the second week of April, Minister Obaidul Quader stated to the media that he was unaware of the NBR's proposal.

Meanwhile, this week, the NBR has revealed plans to slightly increase the VAT on metro rail tickets for the fiscal year 2024-25 starting from July, which could raise travel costs for commuters. An NBR official, who preferred to remain anonymous, told Bangla Outlook that the metro services haven't been fully operational yet, so the government had previously waived VAT on metro tickets following governmental directives. The VAT will be imposed once they receive the green light from the Prime Minister. "Now, the NBR wants to revoke this VAT exemption to increase revenue collection from this sector," said the official. A decision has been communicated after meetings with the Dhaka Mass Transit Company Limited (DMTCL).

The official further explained that the revenue board could collect approximately 100 crore taka annually from VAT on metro services. According to the laws, a 15% VAT applies to both AC and non-AC rail services, and no exemptions are given for passenger transport under section 26 of the VAT and Supplementary Duty Act of 2012. Since the metro rail is fully air-conditioned, it is subject to the 15% VAT.

Additionally, after the VAT implementation, the cost of a ticket for the shortest distance will increase from 20 taka to 23 taka, and for the longest distance, from 100 taka to 115 taka.

The metro rail has become very popular among the residents of Dhaka, especially among low-income groups, as it provides a relief from public transport chaos and mismanagement. Although the daily passenger count has not yet reached the expected 500,000, it is currently more than 300,000 and is expected to grow. Metro rail authorities have been working towards making the service more popular, and the NBR has decided not to extend the VAT exemption, which is set to expire on June 30. Metro rail authorities had requested an extension, but the NBR has denied this request. Thus, if everything goes as planned, a 15% VAT will be imposed on metro tickets from next July, increasing transportation costs for passengers.