Under Bangladesh’s old rules, a buyer who wanted an electric car faced taxes so steep that most citizens could not afford one. The finance minister said as much himself. “At present, high tax burdens make electric vehicles unaffordable for most citizens,” Amir Khosru Mahmud Chowdhury told parliament on June 11, as he announced a lower tax on electric private cars.
His budget for the year starting July 1 turns the policy around. Imports of electric buses and trucks are exempt from duty except value-added tax, and he proposed keeping that exemption in place through 30 June 2030. Total tax on EV chargers and charging stations falls from 39.75% to 0%. Plug-in hybrids with engines up to 1,800 cc see their regulatory duty withdrawn entirely.
The cost lands on the other side. Tariffs on diesel, octane and petrol vehicles with 1,200 to 1,600 cc engines rise from 132% to nearly 156%. Registration fees for EVs go down.
Why now
The transport sector produces 9% of Bangladesh’s greenhouse gas emissions, according to the minister. Diesel buses and trucks add to the smog over Dhaka and Chattogram. UN estimates say more than 235,000 people a year die from complications of air pollution in the country, and hundreds of thousands have asthma or other respiratory disease.
Mongabay called the package the first coordinated government initiative to modernize the transport system. It also brings in solar power: a 0% tax rate on the sector until 2035, plus a 5% rebate on payments for solar electricity.
Mirza Shawkat Ali, who runs the climate change cell at the Department of Environment, said the previous government had set tariffs that put EVs out of most people’s reach. He said the new measures are a first step toward 25% electric buses and trucks and 30% electric private cars by 2035, in line with the country’s climate pledge, known as its Nationally Determined Contribution.
The hard part
Bus and truck operators are not rushing in. Saiful Islam, a leader of the Bangladesh Bus-Truck Owners Association, said the vehicles cost triple the diesel price and Bangladesh does not make them. Operators would need charging stations, trained repair staff and spare parts, he said. “Unless the government gives us policy support, we cannot go ahead with operating electric buses and trucks.”
Provat Saha, formerly of the Bangladesh University of Engineering and Technology, said the heavy trucks and lorries that do most of the polluting are not electric. The ruling party commands more than two-thirds of the seats in parliament, so the budget is almost certain to pass.
Sources
- Bangladesh cuts EV taxes and raises fossil-fuel car taxes in sweeping green push
- Bangladesh unveils sweeping EV incentives to cut emissions and pollution
