Bangladesh has unveiled a 10-year tax exemption package for renewable energy projects. The new tax breaks will apply to power plants that enter commercial operation between July 1, 2025 and June 30, 2030.
The government of Bangladesh has introduced a 10-year tax exemption package for renewable energy plants, including solar panels, effective July 1, 2025.
The National Board of Revenue (NBR) has issued a notification granting 100% tax exemption for the first five years, 50% for the next three years and 25% for the next two years for renewable energy projects.
These new tax breaks will apply to power plants that enter commercial operation between July 1, 2025 and June 30, 2030.
“Power plants that will be constructed under the build-own-operate (BOO) method under the private sector power generation policy of Bangladesh will enjoy the tax exemption benefit,” NBR chairman Abdur Rahman Khan wrote in the notification. “They will have to meet all the conditions of the energy generation policy and be operated according to the policy guidelines.”
The previous cabinet followed in June 2023 has withdrawn full tax exemptions for the renewable energy sector, causing fear among investors. Since then, both local and foreign investors had repeatedly asked for the tax exemption to be reinstated.
MA Taher, executive member of Bangladesh Solar and Renewable Energy Association (BSREA), said pv magazine that the new tax package will deliver enormous benefits to utility-scale power plants and attract new investment into the sector.
“The tax exemption will help independent power producers reduce production costs, which will reduce energy rates,” he said.
However, Taher has urged the government to grant tax exemptions for rooftops, irrigation pumps and floating solar energy segments, due to the currently high tax burden on such projects.
Bangladesh has a total clean electricity generation capacity of 1.38 GW, of which 1.08 GW is generated from solar energy.
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