DMTCL wants 10yr VAT exemption on Metro Rail service

The Dhaka Mass Transit Company Limited (DMTCL) has formally requested the government to extend the existing Value Added Tax (VAT) exemption on metro rail passenger services for another decade, covering the period from July 1, 2026, to June 30, 2036.

In a letter sent to the National Board of Revenue (NBR) through the secretary of the Road Transport and Highways Division, DMTCL Managing Director Faruk Ahmed highlighted the need to continue the VAT waiver beyond the current deadline, which is set to expire on June 30, 2026.  The company argued that imposing VAT on the metro rail would not be justified, as it operates as a mass transit system with a uniform fare structure, accessible to all citizens without class-based differentiation.

Citing international experience, DMTCL noted that metro rail operations rarely cover all costs through fare revenue alone.

 Globally, fare income typically accounts for up to 65 percent of total operating costs, with governments subsidizing the remaining 35 percent. 

The letter emphasized that the Metro Rail Act, 2015 mandates affordable fares for the public, and the fully electric MRT Line-6 contributes to environmental protection by reducing carbon emissions by an estimated 202,762 tonnes annually.