Ridesharing services to get costlier due to VAT: Piickme

A local ridesharing platform, Piickme, today said additional taxes on vehicles’ owners and value added tax (VAT) on every ride will increase the cost of ride.

The government needs to consider the taxes as ridesharing is a very promising industry for the country’s overall growth, Shariful Islam Tareq, senior manager (business operation) of Piickme, said at a press conference at a city restaurant.

In the proposed budget on Thursday, the finance minister has proposed 7.5 per cent VAT on ridesharing and at the same time it also proposed 4 per cent withheld taxes on the vehicle owners, which the industry people are saying as disaster.

The country’s each and every ridesharing company is running their business with huge subsidy and it is not the right time to impose VAT on it, said Tareq.

“We need to run training sessions for the riders, to operate call centers and with the operational cost the investment number is huge. We are not sure when we will get return from it,” Tareq added.

Piickme also proposed the government to define ridesharing apps as IT Enabled Services (ITES) instead of Virtual Business, so that their tax is reduced and they get some additional benefits.

The country has entered into ride-hailing culture in 2016 and currently on an average about 40,000 rides are provided through different companies per day.