Airlines will have to count 15 percent value added tax (VAT) on aeronautical services provided by the Civil Aviation Authority of Bangladesh (CAAB), according to the National Board of Revenue (NBR).
The tax authority said the VAT would be applicable on charges of services, such as landing, parking, scanning and storing of goods.
The NBR made the observation in response to letters from the Ministry of Civil Aviation and Tourism and the International Air Transport Association (IATA).
However, food or catering services to be provided to passengers onboard will remain VAT-free as food can be consumed outside the territory of Bangladesh, said a senior official of the NBR.
The tax administrator notified the CAAB, the IATA and its field offices in this regard on October 27.
An official of an international airline operating in Bangladesh, seeking to remain unnamed, said levying the VAT on aeronautical services will increase ticket prices, as carriers will pass the tax burden onto the consumers.