Will tax on road transport operators not hike the fares? | The Daily Star
12:00 AM, June 19, 2019 / LAST MODIFIED: 12:00 AM, June 19, 2019

Will tax on road transport operators not hike the fares?

Government must be vigilant

It is often an uncomfortable necessity for governments to raise taxes in order to reduce the budget deficit and raise revenue to fund its innumerable functions and projects. Thus the 25 percent increase in taxes on the earnings of road and transport operators, though not unreasonable, is a matter of concern as it may be used as a pretext by transport owners to hike the fares.

According to the secretary general of Bangladesh Transport Owners’ Association (BRTOA), a 25 percent hike in fixed tax would affect the sector which operates around three lakh vehicles including buses and trucks. If taxes are increased all of a sudden, it may discourage investment in the transport sector—something that is badly needed given the shortage of public transport options. More importantly, there is always the possibility of transport companies passing on the extra cost on the passengers by charging higher fares.

This is not good news for those who are compelled to take public transport every day and already face hardship in terms of not being able to access public transport because there are not enough buses available which allows for arbitrary hikes in fares. Moreover, a value-added tax (VAT) on passenger vessels (water transport) of five percent, as proposed in the budget, may result in a five percent increase in the fares, according to such vessel owners, thus further burdening the passengers.

It is concerning because the transport sector in our country has not exactly provided adequate or satisfactory service to the people. The number of accidents leading to heavy casualties due to reckless driving and unfit public buses is still unbelievably high. We need more well-maintained buses and trucks on the streets driven by conscientious, legitimate drivers who will not resort to taking inhuman numbers of trips to make money for their bosses. The government, thus, has to remain extra vigilant to make sure that this increase in tax is not used to increase fares which will only add to the passengers’ woes.

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