No VAT on metro rail for another two years

Finance Minister Amir Khasru Mahmud Chowdhury has proposed extending the existing VAT exemption on metro rail travel for another two years.

In his budget speech for the 2026-27 fiscal year on Thursday, June 11, he said, "I propose extending the VAT exemption on metro rail services until June 30, 2028."

Under the current VAT law, there is a provision to impose 15 per cent VAT on tickets for any air-conditioned train. Although the metro rail is fully air-conditioned, no VAT has been imposed on this service since its launch in December 2022. In July 2024, the NBR attempted to impose VAT, but it was ultimately not levied due to passenger protests and government initiatives.

Subsequently, the NBR has been issuing notifications from time to time granting VAT exemptions. In its latest notification issued in December, the authority granted VAT exemption until June 30, 2026.

Alongside the two-year VAT exemption, the finance minister also announced a 25 per cent discount on metro rail fares for senior citizens aged 65 years and above. They will also get completely free travel on regular trains.

Outlining the government's plans for the metro rail, Amir Khasru Mahmud Chowdhury said the government will build a modern public transport network comprising six metro rail lines, as well as a monorail-based feeder network connected to the metro rail.