Owning a car in Bangladesh may not be a convenient experience due to various reasons such as road safety concerns, high taxes, and expenses. However, car owners have no other option but to bear the costs.
In particular, the tax amounts for new and existing cars in Bangladesh are considerably high, and it’s worth knowing how much they are.
Overview of Car Taxes in Bangladesh
In the 2020-2021 budget, the Bangladeshi government has increased the tax on cars. The new tax policy has significantly raised the annual income tax on cars, resulting in car owners having to pay more than before. For instance, the annual income tax for 1500 CC cars was previously BDT 15,000 but has now increased to BDT 25,000.
The income tax on a 2000 CC car has gone up from BDT 30,000 to BDT 50,000, while the tax for cars up to 2500 CC has increased from BDT 50,000 to BDT 75,000. The income tax for 3000 CC cars has increased from BDT 75,000 to BDT 125,000, and for vehicles above 3500 CC, the annual tax has risen to BDT 2 lakh. It’s important to note that the 1500 CC cars, which are primarily used by the middle and lower classes, have experienced a 7% increase in tax.
Income Tax on Cars in Bangladesh
The increase in income tax on cars has not been well-received by the people of Bangladesh, especially the middle-class car owners. This is because the income tax must be paid annually, making it an additional financial burden. Additionally, for car imports in Bangladesh, dealers and importers have to pay hefty taxes.
The amount of tax to be paid is dependent on the car’s CC and whether it’s a completely built unit (CBU) or a completely knocked down (CKD) unit. For CBU cars, the taxes range from 128% to 628% depending on the CC, while for CKD cars, the taxes range from 69% to 642%.
The sudden increase in annual income tax on cars has generated controversy as paying BDT 25,000 every year for 1500 CC cars can be challenging for middle and lower-middle-class car owners. Furthermore, if the new tax policy becomes active, car owners in Bangladesh will be understandably worried.
