Favorable tax policy for growth of the renewable energy sector is pivotal for realising the Prime Minister’s vision of sourcing 40 per cent of the country’s energy needs from renewable sources. To that end the high import duties and taxes currently imposed on inputs required solar energy systems are creating a serious barrier.
Former Governor of Bangladesh Bank and Professor of the University of Dhaka, Dr Atiur Rahman said this while chairing a pre-budget seminar titled “Favorable tax policies for renewable energy sector in the National Budget,” reads a press release issued Monday.
The panel discussants in this session organised by Unnayan Shamannay were- BIBM Faculty Member and Green Finance Expert Khondker Morshed Millat, Director of the Institute of Energy, University of Dhaka Dr Nasif Shams, and internationally acclaimed renewable energy entrepreneur Dipal C Barua.
Representatives from think tanks and civil society organisations along with media professionals and renewable energy sector stakeholders participated in the discussion session.
Dr Atiur Further pointed out that removing the duties and taxes imposed on inputs such as solar inverters and solar panels may reduce the cost of installing solar systems by 8 to 11 per cent.
Considering these, he believes, these taxes and duties should be completely removed or at least significantly reduced in the coming National Budget with the intention of promoting solar energy in Bangladesh.
Khondker Morshed Millat added that without the right set of tax incentives solar energy entrepreneurs will not be able to capitalise on the available green finance from commercial banks and NBFIs.
Dr Nasif Shams said, “Tax incentives must be ensured to reduce prices of solar energy systems which in turn will increase the demand for solar energy in Bangladesh to a significant extent.”
He further added that with desired level increase in demand for solar energy, local entrepreneurs may even be interested to produce the said inputs domestically.
Dipal C Barua said, “Products imported for renewable energy must not be equated with other imports.
“While the government may lose some revenue by exempting all duties and taxes on solar energy-related imports, the possible reduction in fossil fuel expenses due to expansion of solar energy will be much higher,” he added.
