BRTA unable to collect surcharge against govt vehicles

The Bangladesh Road Transport Authority (BRTA) is facing obstacles in collecting environmental surcharges against multiple vehicles owned by the government and tax-exempt institutions as they do not have a taxpayer number.

The transport regulator's existing software cannot identify the number of vehicles owned by tax-exempt institutions, the BRTA told the tax authorities on 21 September.

In the current budget, the government introduced a carbon tax policy, requiring taxpayers with multiple cars to pay an additional fee of Tk25,000 to Tk3,50,000 when registering or renewing a second vehicle, depending on its engine capacity.

The surcharge has been introduced with the aim of reducing carbon emissions, addressing city traffic congestion, and promoting the use of public transport.

This is payable as advance income tax during the renewal of the fitness of a vehicle at the BRTA.

On 30 July, the National Board of Revenue wrote to the BRTA, instructing the collection of the surcharge at the specified rates from all owners of a second vehicle.

However, government, semi-government, state-run autonomous bodies and corporations, foreign diplomats, diplomatic missions, offices of the UN and its affiliate organisations, offices of development partners, educational institutions under MPO, public universities, gazetted war-wounded freedom fighters or affiliated organisations do not pay tax against motor vehicles.

After a series of correspondences between the two authorities regarding the confusion over the matter, the BRTA on 21 September asked the NBR for further review and clarification on the issue.

In the letter, the BRTA informed the revenue board that multiple vehicle ownership is cross-referenced with the respective taxpayer's number.

Therefore, the letter stated, if an individual or organisation lacks a taxpayer's number and has multiple vehicles, the existing BRTA software cannot locate their information.

Former NBR member Syed Md Aminul Karim explained that under the Income Tax Act, certain organisations, such as government, semi-government, autonomous bodies, and corporations, are not required to have a taxpayer's number since income tax does not apply to them.

"Consequently, the number of vehicles owned by these institutions cannot be extracted from BRTA's software. Changing the law to compel these institutions to obtain a taxpayer's number would be a challenging task," he said.

He recommended addressing the issue through manual collection of the environmental surcharge, where organisations could voluntarily declare the number of vehicles they possess.

Mahbub-E-Rabbani, director (road safety) of the BRTA, said he was not aware of the matter and would look into it.

The carbon tax rates will depend on a vehicle's engine capacity and the tax for a person or organisation will be fixed based on the higher capacity vehicle in case of multiple ones.

For every second and subsequent vehicles, an owner of cars up to 1,500cc will have to pay Tk25,000 in surcharge. The charge doubles for a car with an engine capacity of 1501cc to 2,000cc.

The owners of second cars with a capacity of 2,001cc to 2,500cc will have to pay Tk75,000 for every car as the environmental protection surcharge.

The tax authorities will impose Tk200,000 as surcharge for second or third cars over 3,000cc.

The owners of second or third cars with engine capacity of 3,500cc and above will face a surcharge of Tk3,50,000.