No advance tax for local authority vehicles: NBR clarifies 

The National Board of Revenue (NBR) has clarified the application of Advance Income Tax (AIT) exemption for vehicle registration and fitness renewal. This exemption applies to seven types of organisations, including local government bodies.

In an official statement, the NBR confirmed that AIT will not be levied on registrations of vehicles owned by city corporations, zilla parishads, upazila parishads, municipalities, and union parishads.

This clarification was issued on 8 April, following inquiries from local government institutions.

A senior official of the tax wing told The Business Standard, "We received information that the Bangladesh Road Transport Authority requested certificates from local government bodies to verify their AIT exemption. This led to confusion, and all the institutions approached us for certificates.

"To address this issue, we issued a clarification confirming that these institutions are already exempt from AIT under existing regulations. They no longer need to request certificates from the NBR."

This clarification is intended to streamline the process and eliminate unnecessary steps for local government bodies when registering their vehicles.

Six other categories are exempt from AIT on vehicle registration, as outlined in the Income Tax Act. These categories include projects and programmes under local government, diplomatic offices, foreign missions and UN organisations, development partners and their offices, educational institutions under MPO, public universities, and freedom fighters.