HELP & ADVICE

How Much Tax to Pay for a Car in Bangladesh

If you own a car in Bangladesh, then you may already know the hefty amount of car tax in Bangladesh. But if you don't own one yet then you are in the right place to get all the information. Firstly, you need to know about what tax is or how can you know if you are eligible. The Bangladesh Government has made it a mandatory law to pay your accumulated taxes for every citizen. However, not everyone is required to pay taxes as there are certain regulations constraining their eligibility. So how will the government identify you? 

This is where your e-TIN comes in, it is your 12-digit Tax Identification Number. Any Bangladeshi citizen who is above the age of 18 years and earns a feasible sum is eligible to register. You can get your e-TIN certificate online by applying through Adviser Bangladesh for a quick and easy process. For a more detailed step-by-step guide check out our previous post on tax return.

Types of Car Tax in Bangladesh

As you may or may not know, there are a few different types of taxes levied on eligible vehicles. But, the amount paid for each or individually is certainly not the same. Different people have different professions and a certain amount of belonging on which they can be taxed. Hence, to categorize them we have specified each type and their additional payable standards for car tax in Bangladesh below.  

Custom Taxes:

Most vehicles including cars have a Customs Tax imposed on them depending on certain aspects. In Bangladesh generally, customs are in charge of inspecting the goods that go in and out of the country. They are also the authority that imposes custom duties which are a set of listed taxes on certain products. The tariff or tax is handled by their officers who can increase the amount after validating certain protocols. The taxable amount can be increased according to price, imported country, Size, or weight of the vehicle.  

Value-Added-Tax (VAT):

VAT is an added tax that you need to pay when buying a product listed by the government. In Bangladesh, the government has decided that the maximum amount of tax to be added is 15% on any product. The added percentage can differentiate on quantity and country of origin of the product. Thus, whoever buys the product must pay for the taxable amount, which the seller later forwards to the government. For purchasing a standard car from a local vendor the buyer pays all the additional charges including the 15% VAT. Besides, only For purchasing any standard vehicle, you are permitted a 15% car tax in Bangladesh.

Supplementary Duty (SD):

SD is an additional tax added to mostly luxurious and imported products in Bangladesh. So, paying SD is mandatory on all cars as all of them are identified as imported products. According to, the Supplementary Duty Act(2012) the standard tariff can be up to 45% of the purchased value. For cars and similar vehicles, this rate can vary depending on a few criteria listed in the variable tariffs. The taxable amount is set at 25,000 taka for vehicles including an engine capacity of 1500CC and above. While 200% is set for vehicles having an engine capacity between 2001CC to 3000CC and 300% for 3001cc to 4000CC. As, for vehicles with engine capacity exceeding above at 4000CC or around 4500CC the taxable amount is 350%. Unfortunately, according to the proposed budget for FY2023-2024 car tax in Bangladesh could soon be on the rise once again.

Income Tax:

Income tax is mostly accumulated on personal earnings and owned property rather than a fixed percentage on an individual product. As mentioned above you are eligible for income tax only if you fall under certain criteria. Additionally, if you own a car or similar vehicle then it would be estimated towards your owned property listings. This added value to your property will be determined by the category of the car you own. As discussed in the SD section above luxurious cars have more added value than regular car tax in Bangladesh.

The current value of your car will add to the total estimated yearly tax. According to the new Environmental Protection Surcharge in the upcoming FY2024, taxes will increase for people owing multiple cars. According to, the new law owners of one car having 1500CC are required to pay Tk 25,000 in surcharges. But, having more than one car up to 2500CC owners will have to pay the authorized Tk 75,000. Secondly, owning a second or third car over 3000CC will add a surcharge of Tk 200,000. Lastly, owners of luxury vehicles with engine capacity over 3500CC will need to pay Tk 350,000 additionally.

Corporate Tax:

Corporate Tax is very similar to individual income tax but based on the profit and assets associated with a corporation. Corporation Tax is calculated by totaling the taxable amount from the number of cars owned by the corporation. Not to mention, Corporations are also included in the new Environmental Protection Surcharge. So, taxes for a corporation could lead up to a staggering Tk 350,000 for owning over 3500CC engine capacity.

Why is Car Tax in Bangladesh Increasing?

The National Board of Revenue (NRB) is the one that imposes that taxation percentage on products and valuable items. Furthermore, for a product that is imported or shipped from outside of Bangladesh then you must pay additional customs charges. There are many specified and unlisted charges for many unconditional goods when the seller resides out of Bangladesh. This is because the money you pay the seller never really stays in the country, which is economically bad.

So, financially speaking the more you spend abroad the less your economic value becomes. That is why not only Bangladesh but many countries have restrictions on importing products of significant value. Most of the cars that are sold or available here in Bangladesh are all imported. As there no companies or factories of our own that produce these cars. Thus, buying a car is incredibly expensive as up to 200% can be added to the car tax in Bangladesh.

Due to increased traffic and over congestion, the government is taking more steps to reduce vehicles on the roads. Also, Environmental Protection Surcharge is a new green initiative by the government trying to encourage people to avoid motor vehicles. Increasing the additional charges to be paid for owning multiple vehicles and maximizing annual car tax in Bangladesh. This can have both good and bad sides as this could potentially reduce traffic and encourage less carbon emission. Sadly, owning a car seems to be more elusive for the middle class due to the rising car tax in Bangladesh.