VAT imposed on ride-sharing services

Government is planning to impose 5 percent value added tax on the ride-sharing services which will make these transporting systems in big cities of the country costlier.

National Board of Revenue today issued a Statutory Regulatory Order (SRO) in this regard that reads customers will have to pay 5 percent vat on using ride-hailing services like Uber and Pathao, which is getting popular among the city dwellers over the last one year. 

This tax will have a negative impact on the digital service industry, said Hussain M Elius, the current CEO of Pathao, popular ride haling service in the country.

"This will make the service costlier to the customer and we are very surprised of it and we will pass it on to the customers," said Elius, who also the pioneer of e-commerce product delivery channel Pathao.

He said it seems collecting tax from digital products is much easier and that's why the government is imposing new taxes.

Right now, there are about 20 ride-hailing services in Dhaka and other big cities in the country; of them Uber and Pathao are the most popular.