An owner of a diesel bus in Dhaka just heard the government say it wants fewer of them. In its budget for the fiscal year starting July 1, Bangladesh dropped the heavy taxes it had put on electric vehicles and raised the cost of running fossil-fuel ones.
Finance minister Amir Khosru Mahmud Chowdhury set out the plan in parliament on June 11. Electric buses and trucks get a “full exemption (except value-added tax)” on imports, and the exemption runs until 30 June 2030. Charging stations also get relief: he proposed cutting the total tax on EV chargers and charging stations from 39.75% to 0%. “A nationwide charging network is essential for the smooth operation of electric vehicles,” he said.
Solar power is covered too, with a 0% tax rate until 2035 and a 5% rebate on payments against solar electricity bills. Registration fees for EVs come down. Mongabay, which reported the details, called it the first coordinated government effort to modernize Bangladesh’s transport system.
Pollution behind the policy
Transport produces 9% of the country’s greenhouse gas emissions, the minister said. Thousands of diesel buses and trucks add to the air pollution in Dhaka and Chattogram. UN estimates put the number of people who die each year from complications of air pollution in Bangladesh at more than 235,000, and many more live with asthma and other respiratory disease.
The budget goes the other way on fossil fuels. Owners of diesel, octane and petrol vehicles with engines of 1,200 to 1,600 cc would pay nearly 156% in tariffs, up from 132%. Chowdhury said high taxes now make electric vehicles unaffordable for most citizens, and he announced lower tax on electric private cars.
The ruling party holds more than two-thirds of the seats in the unicameral legislature, so passage is almost certain.
Operators have doubts
Saiful Islam of the Bangladesh Bus-Truck Owners Association said he welcomed the proposals, but warned the details are hard. Bangladesh does not make electric buses and trucks, so they must be imported. They cost triple the price of diesel ones, he said, and need charging stations, trained repair staff and spare parts. Then there is time. “Currently, a bus needs five minutes to refuel in a station,” he said. “But if a bus takes 30 minutes for recharging, the passengers will not accept it.”
Provat Saha, a former teacher at the Bangladesh University of Engineering and Technology, called the move laudable but doubted it would clean the air, since large trucks and lorries cause most transport pollution and are not electric. Anisur Rahman, a marketing professor at Dhaka University, said the government should have done a feasibility study first.
Mirza Shawkat Ali of the Department of Environment said the tariff waiver is the first step toward a target of 25% electric buses and trucks and 30% electric private cars by 2035. “Bangladesh always prioritizes adaptation, but now we are going for mitigation as well,” he told Mongabay.
Sources
- Bangladesh Introduces Major EV Incentives to Reduce Emissions
- Bangladesh unveils sweeping EV incentives to cut emissions and pollution
