NBR mulls new taxes for bikes
Higher CC vehicles may face steeper levies, battery-run autorickshaws likely to come under tax net
The National Board of Revenue is weighing a new advance income tax (AIT) regime for the country's lakhs of motorcycles, while simultaneously eyeing to hike existing AIT on high-capacity (CC) vehicles, finance ministry sources said.
The tax regulator is also considering imposing AIT on the burgeoning fleet of battery-run autorickshaws, popularly known as "Bangla Tesla" in the country.
A proposal in this regard was placed before Finance Minister Amir Khosru Mahmud Chowdhury yesterday during a budget-related meeting, according to a senior finance ministry official, speaking to The Business Standard on condition of anonymity.
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The official noted that the NBR plans to impose AIT on motorcycles in addition to the existing road tax collected during vehicle registration. Meanwhile, the regulator also plans an upward revision of the engine capacity-based AIT for motor vehicles.
A senior NBR official, speaking to TBS on condition of anonymity, also confirmed that such a proposal has been submitted to the finance minister for approval. The official indicated that the tax hike is specifically targeting higher-displacement (CC) vehicles, which are traditionally associated with more affluent owners.
While the move aims to increase revenue from the luxury segment, the official declined to disclose the exact percentage of the proposed increase.
As of June 2025, BRTA data shows that there are over 2.3 lakh registered sport utility vehicles (SUV) in the country. Full-size or luxury SUVs usually range between 2,500cc and over 4,000cc.
According to an investigation by the Central Intelligence Cell of the NBR in 2025, at least 5,288 luxury vehicles with engine capacities above 3,000cc are registered with the BRTA in the country.
Currently, motorcycle owners pay road tax along with registration fees. The tax stands at Tk2,300 for two years and Tk11,500 for 10 years. For other motor vehicles, annual taxes currently range from Tk25,000 to Tk350,000 depending on engine capacity.
The NBR said motorcycles up to 110cc are likely to remain exempt from the new AIT.
Motorcycles between 111cc and 125cc could face an annual tax of Tk2,000, while owners of bikes between 126cc and 165cc may have to pay Tk5,000 a year, the official said. Motorcycles with engines above 165cc may be subject to an annual advance income tax of Tk10,000.
The NBR official told TBS that the proposal was aimed at broadening the tax net and improving tax compliance.
"Even if AIT is paid, taxpayers will be able to adjust the amount when submitting their tax returns at the end of the year," the official said.
According to the latest data from the Bangladesh Road Transport Authority, more than 48 lakh motorcycles are currently registered in the country.
Experts said taxes on expensive motorcycles could be justified, but warned that a large number of bike users are ride-sharing workers, delivery operators, small entrepreneurs, sales representatives and medicine suppliers.
Many lower-income families also use motorcycles as an affordable means of transport for school commutes, shopping and other household needs, they said. Analysts warned that imposing new taxes on such motorcycles would increase costs for a significant section of lower-income people.
Syed Md Aminul Karim, a former member of income tax policy at the NBR, however, described the move as positive overall.
"If AIT is imposed on motorcycles, it would be reasonable from a revenue point of view because it would increase transparency," he told TBS.
Explaining his position, he said the government needed to increase tax collection. "When we were in office in 2014, the tax-to-GDP ratio was 10.2%. Instead of increasing over time, it has now fallen below 7%," he said.
But, he added, it would not be reasonable to bring lower-end motorcycles used by low-income people under the tax net. "A large number of people support their families by riding motorcycles. So putting additional tax pressure on them would not be justified," he said.
Speaking to TBS, Ali Ahmed, who earns a living by operating a motorcycle for hire, said the proposal would increase pressure on struggling riders.
"I ride a 125cc bike. My income has already fallen while costs have increased. If I have to pay taxes every year on top of that, how will I run my family?" he said.
"For safety, even a 125cc bike is not enough. At least 150cc should be standard. But if taxes are imposed this way, people will be forced to buy lower-capacity bikes, which could increase accident risks," he added.
Discussion around motorcycle taxation intensified last year after higher-end bikes such as Royal Enfield and Yamaha R15 entered the market.
The Royal Enfield motorcycles attracted considerable attention in Dhaka, with prices ranging from Tk350,000 to Tk700,000, while the Yamaha R15 costs more than Tk600,000.
At the time, many people argued that buyers of such expensive motorcycles should have their income tax files examined.
Tax net for battery-powered rickshaws
According to NBR sources, battery-run autorickshaws operating in city corporation areas might face an annual AIT of Tk5,000 as per the plan. The tax will likely be Tk2,000 for vehicles operating in municipalities and Tk1,000 for those running in union parishad areas.
There is no accurate official figure for battery-powered autorickshaws nationwide as they are not currently subject to mandatory registration. However, sector insiders estimate there are more than three million such vehicles across the country.
Last year, the government drafted the "Electric Three-Wheeler Management Policy 2025" in an effort to bring battery-powered rickshaws under a registration system.
The draft policy includes provisions requiring registration certificates, updated fitness certificates and tax tokens. It also states that duties and taxes on electric three-wheelers would be collected at rates set by the NBR.
However, analysts said bringing battery-powered rickshaws under the tax net would be difficult as the vast majority remain unregistered.
