The Government of Bangladesh has extended the Value Added Tax (VAT) exemption on metro rail services until 30 June 2026, a move aimed at promoting affordable, sustainable, and environmentally friendly urban transport in Dhaka. The announcement was made on Wednesday through a press release by the National Board of Revenue (NBR), which emphasised that the decision was taken in the public interest.
The extension is intended to encourage greater use of Dhaka’s modern, fast, and safe metro rail system, while also alleviating the capital’s notorious traffic congestion. By keeping fares affordable, the government aims to make metro travel a more attractive option for commuters across the city.
Previously, the VAT exemption was scheduled to expire on 31 December 2025. However, recognising the continued importance of a reliable urban transport system in reducing congestion and improving city mobility, the government decided to maintain the tax relief for an additional six months. This decision was made following recommendations from the Ministry of Road Transport and Bridges, which highlighted the metro rail’s role as a key component of Dhaka’s sustainable public transport network.
A formal government notification issued on Tuesday confirmed the extension. The Ministry noted that this measure would not only benefit daily commuters by reducing the financial burden of travel but also encourage wider adoption of environmentally friendly transport alternatives, helping to lower air pollution in the city.
Experts have praised the move, suggesting that it may also increase ridership on the metro, thus reducing road traffic and supporting long-term urban planning goals. By extending the VAT exemption, the government demonstrates its commitment to sustainable, accessible, and efficient public transit, aligning with broader objectives to modernise Dhaka’s transport infrastructure.
Key Details of Metro Rail VAT Exemption :
| Item | Details |
| Previous VAT Exemption Expiry | 31 December 2025 |
| New Expiry Date | 30 June 2026 |
| Purpose | Keep fares affordable, reduce congestion, promote sustainable transport |
| Responsible Ministry | Ministry of Road Transport and Bridges |
| Issuing Authority | National Board of Revenue (NBR) |
| Expected Impact | Lower commuter costs, increased metro usage, reduced traffic congestion |
The government’s decision to extend the VAT exemption is expected to provide both economic relief for passengers and environmental benefits by encouraging public transport use over private vehicles. With this initiative, Dhaka’s metro rail continues to solidify its role as a cornerstone of the city’s modern and sustainable transportation system.