Cost of rideshare may go up as well

Cost of ridesharing services might go up as well with the hiked VAT rates proposed in the budget on the popular mode of daily commute in Dhaka city.

The proposal in budget is 7.5 per cent VAT, what is 5 per cent now. Also, vehicle owners are facing higher tax and may pay 4 per cent of their earnings, up from 3 per cent.

Finance Minister AHM Mustafa Kamal yesterday placed his first budget in the parliament where he proposed 7.5 percent VAT on social media and virtual business.

This incremental tax will negatively impact the growth of the digital service industry especially ride-hailing service, said Hussain M Elius, chief executive officer of Pathao.

"We are running our business without seeing any profit and every one of the industries are facing loss," he told The Daily Star today, a day after the budget proposal.

He suggested, taxes can be imposed after allowing the industry to grow to a full bloom. "That way the government will be able get more benefits in the long run."