Govt to waive import duty on electric school buses to cut fuel use

The government has decided to waive import duties on electric school buses, aiming to reduce fuel consumption and promote cleaner transport in the education sector, the National Board of Revenue (NBR) Chairman Abdur Rahman Khan said today (7 April).

Speaking at a pre-budget consultation with transport sector stakeholders at the NBR headquarters, he said the initiative is part of a wider strategy to curb fuel use in the country's transport system.

"The government wants to cut fuel consumption in the transport sector. As a first step, we have decided to set zero import duty on electric buses used for school students," he said.

He added that the decision will be implemented immediately, without waiting for the national budget. "There will be broader changes in the electric vehicle (EV) sector in the upcoming budget, but we will not wait till then. A Statutory Regulatory Order (SRO) will be issued soon to formalise the duty exemption," he noted.

Industry leaders at the meeting urged the government to expand incentives for electric vehicles (EVs), including reducing registration costs through clearer classification based on engine capacity (CC) and kilowatt ratings.

The NBR chief acknowledged longstanding delays in VAT refunds, saying the issue – stemming from the lack of an automated system – has persisted for over a year and a half and promising to solve the problem.

Requests to reduce taxes on jet fuel were declined due to concerns over misuse and revenue leakage. "We must also consider revenue protection," the chairman said, noting the government's target to raise tax collection from Tk4 lakh crore to Tk6 lakh crore.

Petroleum dealers also sought duty-free imports of tank lorries used for fuel transportation, with the NBR chief promising to consider the proposal.

Meanwhile, transport operators requested zero-duty imports of truck chassis to replace ageing vehicles—some over 25 years old—but officials indicated that balancing environmental priorities with revenue needs remains a challenge.

Representatives from the motorcycle sector proposed allowing the use of compressed natural gas (CNG) in motorcycles. In response, the NBR chief discouraged further reliance on gas, citing domestic shortages and the high cost of LNG imports.

He instead highlighted the need for shifting towards renewable energy in the current context.

Aviation operators, meanwhile, said rising jet fuel taxes – now at Tk42 per litre from Tk18 previously – have significantly increased operating costs, urging the government to restore earlier rates.

The meeting brought together a broad range of industry groups, including representatives from the Bangladesh Automobile Assemblers and Manufacturers Association (BAAMA), Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), petroleum dealers, motorcycle manufacturers, shipbuilders and aviation operators.