DHAKA — The air in Dhaka’s Kamalapur bus terminal tastes of diesel. On a typical morning, a haze hangs over the concrete, thick enough to sting the eyes. Drivers honk, engines idle, and the exhaust from thousands of aging buses and trucks pours into a city already ranked among the world’s most polluted.
That scene may be changing. On June 11, finance minister Amir Khasru Mahmud Chowdhury stood in parliament and announced a sharp reversal of policy.
Electric buses and trucks will now enter Bangladesh with zero tariffs. Charging station equipment, previously taxed at 39.75%, is now duty-free. Solar energy production gear also gets the same treatment.
The incentives run until June 30, 2030. The move is not small.
For years, electric vehicles were taxed heavily in Bangladesh, effectively priced out of a market dominated by diesel and petrol. Now the government is creating a price wedge. At the same time it cuts taxes on EVs, it has hiked tariffs on fossil-fuel-powered vehicles.
The goal: push fleet operators to switch. The human cost of the old system is stark. According to UN estimates, more than 235,000 people die every year from complications caused by air pollution in Bangladesh.
Hundreds of thousands more suffer from asthma and other respiratory diseases. The transport sector contributes 9% of greenhouse gas emissions, Chowdhury said in his budget speech.
Dhaka and Chattogram, the two largest cities, are the worst hit. Diesel-run buses and trucks are the main culprits. They are old, poorly maintained, and everywhere.
On any given street in Dhaka, a pedestrian inhales exhaust from a bus that should have been retired years ago. The new policy targets that directly.
Chowdhury called the initiative the first coordinated government effort to modernise Bangladesh’s transport system. He proposed a “full exemption (except value-added tax)” on imports of electric buses and trucks. Registration fees for EVs have also been reduced.
But the policy is not just about vehicles. “A nationwide charging network is essential for the smooth operation of electric vehicles,” the finance minister told parliament. To support that, he said, “I propose reducing the total tax incidence on EV chargers and charging stations from 39.75% to 0%.” Without the charging infrastructure, electric buses and trucks would be stranded.
The tariff cut on charging gear is a direct attempt to solve that problem. The solar equipment exemption fits the same logic.
If the electricity used to charge EVs comes from coal or natural gas, the emissions savings shrink. Zero tariffs on solar panels and related gear make it cheaper to build clean power sources alongside the charging network. The budget takes effect July 1.
That is when the zero tariffs kick in. It is also when the higher taxes on fossil-fuel vehicles apply.
The combined effect is meant to be immediate: make it cheaper to buy and run an electric bus than a diesel one. Whether the policy works depends on execution. A zero tariff is one thing.
Getting the chargers installed, keeping the grid stable, and convincing fleet owners to take a chance on new technology is another. Bangladesh has no domestic electric bus manufacturing. Every vehicle will be imported.
The supply chains, maintenance crews, and spare parts networks do not yet exist at scale. Still, the direction is clear.
After years of taxing electric vehicles out of reach, the government has chosen a different path. Analysts say the move could reshape transport markets across South Asia. For now, though, the diesel haze still hangs over Kamalapur terminal.
The change starts July 1.
