Government Grants 10-Year Tax Exemption for Renewable Energy Producers

The Bangladeshi government has decided to offer a 10-year tax exemption to renewable energy-based power producers, extending the previously announced 5-year benefit. The decision was made on Thursday during an inter-ministerial meeting on "Tariff Rationalization of Solar Panels," chaired by Economic Advisor Dr. Saleh Uddin Ahmed. Key officials, including Energy and Power Advisor Muhammad Fawzul Kabir Khan, secretaries from the Finance and Power Divisions, and senior representatives from the National Board of Revenue (NBR), were present.

Additionally, the meeting approved a waiver of 5 percent advance VAT on imported materials required for renewable energy generation, provided the imports are certified by the Power Division. The NBR is expected to issue a formal notification soon.

Muhammad Fawzul Kabir Khan emphasized that this measure is intended to promote renewable energy production, aligning with the government’s goal of generating 4,000 MW of renewable energy by 2030. He expressed optimism that the tax incentives would facilitate achieving this target.

According to the Power Division, under Section 76 of the Income Tax Act 2023, renewable energy producers commencing commercial production between July 1, 2025, and June 30, 2030, will receive a 100 percent tax exemption for the first 10 years. The exemption will gradually reduce to 50 percent for the following three years and 25 percent for the next two years.

This revised policy follows an NBR announcement on October 29, which initially provided a five-year tax exemption to renewable energy producers meeting the same timeline. However, in response to further deliberations, the government extended the benefit to 10 years to bolster the renewable energy sector.