The National Board of Revenue (NBR) has exempted value-added tax on the fares of Dhaka metro rail, which has gained a lot of popularity since the beginning of its operations.

The tax administration announced the exception on metro rail fares through an order yesterday and the decision came more than six months after the benefit was discontinued.

The VAT exemption came into effect from yesterday and will be valid until December 31 this year.

Commuters of metro rail enjoyed VAT exemptions on their fares until June 30 last year. The NBR did not extend the benefit later, despite requests from Dhaka Mass Transit Company Ltd (DMTCL), the state-run operator of the metro rail.

Though the NBR did not exempt VAT, the DMTCL has not hiked the fares with a senior official of the NBR saying that the VAT would be calculated as inclusive in the ticket prices until the exemption.

"There will be no need to hike fares after we have exempted VAT," he said.

The much-talked-about Dhaka metro rail began commercial operations by the end of December 2022 and it became hugely popular among commuters especially office goers and students who got an escape from commuting on chaotic buses.

Roughly, 3.5 lakh people commute through the metro rail daily. 

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