The government is set to propose extending the value-added tax (VAT) exemption on metro rail services until 30 June, 2028, in the proposed budget for FY2026–27.
If approved, the measure is expected to help keep metro rail fares unchanged over the next two years, providing continued relief to commuters who rely on the capital’s mass rapid transit system.
The VAT exemption is part of the government’s broader efforts to reduce traffic congestion in Dhaka and promote efficient urban transportation.
Tax benefits for metro rail services were initially granted until June 2025 and have since been extended in phases, with the current exemption set to expire this month.
The VAT waiver was originally introduced by the Awami League government to encourage the use of metro rail as a modern, safe, fast and environmentally friendly mode of public transport.
Metro rail operations in Dhaka began on 28 December, 2022, with services running between Uttara and Agargaon.
The route was later extended to Motijheel, significantly expanding its coverage within the city.
According to official data, metro rail now carries an average of around 425,000 passengers daily, underscoring its growing role in Dhaka’s urban transport network.
