Government Prolongs Metro Rail VAT Relief to June 2026

The Government of Bangladesh has extended the value-added tax (VAT) exemption on Dhaka Metro Rail services until 30 June 2026, providing a significant relief to daily commuters. The announcement was made on Wednesday by the National Board of Revenue (NBR), citing public interest as the primary reason for the decision.

The VAT exemption, originally scheduled to expire on 31 December 2025, has now been prolonged by six months to further encourage the use of metro services as a modern, safe, rapid, and environmentally friendly mode of urban transport. Officials emphasised that this move is intended not only to reduce travel costs for passengers but also to support the city’s efforts in easing traffic congestion and enhancing public transport infrastructure.

The decision follows a recommendation from the Ministry of Road Transport and Bridges, which highlighted the pivotal role of Metro Rail in providing sustainable and affordable urban mobility. The ministry noted that maintaining low fares will continue to make the metro an attractive alternative to private vehicles, thereby helping to reduce the environmental footprint associated with road traffic.

A government notification issued on Tuesday formally enacted the extension, ensuring that Metro Rail services remain VAT-free for commuters for the next one and a half years. Authorities have stressed that this continuation of tax relief will safeguard passenger affordability, particularly for middle- and low-income residents who rely heavily on public transport.

Experts have welcomed the decision, stating that keeping fares reasonable is crucial for the long-term popularity and viability of urban rail systems. The extension is expected to encourage greater use of Metro Rail, support smoother traffic flow in Dhaka, and promote a more sustainable urban transportation model in line with global environmental standards.

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