Good tax policy necessary for the renewable energy sector: Dr. Atiur

A favorable tax policy for the development of the renewable energy sector is key to achieving the Prime Minister’s vision of obtaining 40 percent. the country’s demand for energy from renewable sources. To this end, the high import duties and taxes currently imposed on the inputs required for solar energy systems create a significant barrier.

Former Bangladesh Bank Governor and Dhaka University Professor Dr Atiur Rahman said this while chairing a pre-Budget seminar titled ‘Favorable Tax Policies for Renewable Energy Sector in National Budget’, a press release issued on Monday said.

The panel discussion organized by Unnayan Shamannaya included BIBM faculty member and green finance expert Khondker Morshed Millat, Director of the University of Dhaka Energy Institute Dr. Nasif Shams and internationally recognized renewable energy entrepreneur Dipal C Barua.

The discussion session was attended by representatives of advisory and advisory centers and civil society organizations, as well as media representatives and interested parties from the renewable energy sector.

Dr. Atiur further noted that removing tariffs and taxes imposed on inputs such as inverters and solar panels could reduce the cost of installing solar systems by 8 to 11 percent.

Considering this, he believes these taxes and duties should be completely removed or at least significantly reduced in the upcoming national budget with the intention of promoting solar energy in Bangladesh.

Khondker Morshed Millat added that without the right set of tax incentives, solar entrepreneurs will not be able to leverage available green financing from commercial banks and NBFIs.

Dr. Nasif Shams said, “Tax incentives should be provided to reduce the prices of solar energy systems, which in turn will significantly increase the demand for solar energy in Bangladesh.”

He also added that with the desired level of increase in demand for solar energy, local entrepreneurs may even be interested in producing this raw material on the domestic market.

Dipal C Barua said: “Products imported for renewable energy use cannot be equated with other imported products.

“Although the government may lose some revenue by exempting all duties and taxes on solar energy imports, the possible reduction in fossil fuel spending as a result of solar energy development will be much greater,” he added.