The government is set to raise the rate of advance income tax on commercially operated motor vehicles in the 2026-27 fiscal year.
Alongside the increase in tax rates, the classification of vehicles will be expanded, bringing several new categories of vehicles under the tax net.
Under the proposed provisions, payment of advance income tax at prescribed rates will be mandatory at the time of vehicle registration or renewal of fitness certificates. Authorities will not be allowed to process registration or fitness renewals unless proof of tax payment is submitted.
The revised tax structure increases advance income tax by one-and-a-half to two times for various categories of vehicles, including buses, air-conditioned minibuses and coasters, trucks and lorries, covered vans, prime movers, pickup vans, human haulers, auto-rickshaws, and taxicabs.
The tax is currently collected during vehicle registration or fitness certificate renewal. Under the proposed rates:
Advance income tax for a 52-seat bus will increase from Tk 16,000 to Tk 25,000, tax on minibuses will rise from Tk 11,500 to Tk 20,000, tax on coasters will increase from Tk 16,000 to Tk 25,000, advance income tax on trucks with a carrying capacity of 5 to 20 tonnes will rise from Tk 16,000 to Tk 30,000.
For trucks with a carrying capacity exceeding 20 tonnes, the tax will increase from Tk 16,000 to Tk 50,000.
The proposed changes are expected to increase the tax burden on the commercial transport sector if implemented in the upcoming fiscal year.
