The government has extended the tax exemption facility for private sector power generation companies till June 30, 2036 from December 2034.
Besides, the required period for power plants to go into production has been extended till June 2024 from December 2022 to get the tax exemption, according to a statutory regulatory order (SRO) issued by the National Board of Revenue (NBR) on Tuesday.
Tax exemptions have been also given in several other cases but coal-based power generation companies will not get this benefit, said the SRO, signed by NBR Chairman Abu Hena Md Rahmatul Muneem.
However, the Ministry of Power, Energy and Mineral Resources through a letter requested the NBR to extend the required duration for coal-based power generation companies to go into production till June 30, 2027 to get tax exemption facility.
“Due to Covid-19 and letter of credit opening difficulties due to forex crunch triggered by Russia-Ukraine war, the implementation of the coal-based projects has been delayed,” the letter reads.
Considering the electricity demand and fuel diversification, the ministry requested the NBR to extend the obligatory provision for going into production for coal-based power plants by amending the SRO.
The ministry proposed incorporating the signing agreement date till June 30, 2024 and commercial operation date till June 30, 2027 for coal-based power plants to get exemption facility.
Meanwhile, the SRO also states that private power generation companies in the country – except coal-fired ones – that will commence commercial production by June 30, 2024, will not have to pay any tax on the income earned from the date of production till June 30, 2036.
Furthermore, the income of foreign nationals working in the companies will not be taxed for the next three years from the date of their arrival in Bangladesh and there will be no tax on interest payable on foreign loans taken by the company.
Companies will not have to pay taxes on royalties, technical know-how and technical assistance fees. Apart from this, the capital gains arising from the transfer of shares of the company are also exempted from tax, the SRO added.
It said companies that will come into production by June 30, 2025, will not have to pay any income tax for the next five years from the date of commercial production and they will pay 50 per cent for the next three years and 25 per cent for the next two years.
However, in both cases, companies enjoying tax exemption have to maintain proper accounts. The power plants will be operated in accordance with the provisions of the Private Sector Power Generation Policy of Bangladesh subject to fulfilling all the conditions.
