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Hiring apps-based vehicles to be costlier

Published : Thursday, 7 June, 2018 at 11:45 PM  Count : 3857

Hiring apps-based vehicles to be costlier

Hiring apps-based vehicles to be costlier

Ride-sharing trips will be a little more expensive after the proposed budget clamped a 5 percent VAT on these services on Thursday.

“It’s the customers who will eventually pay any VAT or taxes imposed. So, it’s a certainty that the prices will go up,” Pathao CEO Hussain Elius told bdnews24.com after the National Board of Revenue’s orders.

In the statutory regulatory order, the NBR said the VAT would be applicable on the percentage of charges earned by those ride-hailing services which have gained popularity in Bangladesh within a year due to the messy public transport system.

But this VAT can deter the riders, the Pathao CEO fears.

“It’s a very price-sensitive market. This 5 percent rise can reduce the number of customers.

“When prices go up, people may not want to take this service,” he said, adding that the industry is still taking baby steps.

“This is going to hit the industry. It’s a 12 to 18 months old industry in Bangladesh. People are still learning how to take this digital service.”

He said the NBR did not discuss the move with them beforehand, bdnews24.com said.

According to him, Bangladesh has currently 2 million registered users of those app-based services operated by about 20 companies – most of which operate on a small scale.

An Uber representative told bdnews24.com they will give a formal reaction to the VAT imposition later.

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