Government Restores Full Tax Incentives for Renewable Energy Plants
Bangladesh’s interim government plans to restore full tax exemptions for renewable energy power plants, aiming to attract investment in the sector. The reinstated incentives would grant investors in renewable energy projects tax breaks until 2030 on income derived from power generation. This comes after the previous government, in June 2023, reduced the incentives, replacing them with a graduated 10-year tax package. Following proposals from Energy Adviser Dr. Mohammad Fouzul Kabir Khan, the Finance Adviser has approved a summary by the National Board of Revenue (NBR) to reestablish these incentives.
Investors who begin production by June 2025 will receive a 10-year tax package, with full tax exemptions for the first five years. Renewable energy analysts believe this will boost investment and recommend further steps, such as leasing public lands and covering transmission costs, to expedite projects. The Centre for Policy Dialogue (CPD) also urged the government to issue tenders for renewable projects, suggesting these incentives could reduce power tariffs. The Energy Adviser notes that maintaining these fiscal packages is crucial for promoting clean energy production and reducing electricity costs.
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