Imposing VAT on metro fares and taking the service further away from the poor, it risks becoming more like a status vehicle—which rich commuters already have plenty of.
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VAT on metro fare
Don't turn metro rail into a status symbol
PHOTO: Monorom Polok
Recently, there has been a lot of discussion about the proposed imposition of a 15 percent VAT on the Dhaka metro rail service. The metro train ticket is currently VAT-exempt, a facility that will expire on June 30.
The National Board of Revenue is unwilling to extend the exemption as part of efforts to generate revenue for funding development projects aimed at making Bangladesh a developed nation by 2041. However, on Sunday, the road transport and bridges minister, Obaidul Quader, said that he had requested the prime minister to reconsider NBR's decision.
The minimum fare for the metro rail is Tk 20, while the per-kilometre fare is set at Tk 5. On the other hand, the per-kilometre fare in a city bus is set at Tk 2.42 and the minimum fare at Tk 10. So, on the surface, the metro fare may not seem much. But for many people from lower-income backgrounds, the difference between the bus and metro rail fares is significant enough to deter them from using the rail service. This difference further adds up when you cover the whole distance between Uttara and Motijheel. For the one-fifth of the population living below the poverty line, it means that they cannot use the service even at its current fare despite its comfort and fast commute times.
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