The Power Division has sought exemption from paying value-added tax and other taxes on imports of solar panels and cells to boost production and use of solar energy in the country.
In a letter to the National Board of Revenue, the Power Division under the power, energy and mineral resources ministry on July 8 said that imports of equipments for solar system should be exempted from taxes like previous financial year 2017-2018.
The NBR in the budget for the current FY 2018-2019 imposed 15 per cent VAT and 4 per cent advance trade VAT on import of photovoltaic cells, and 15 per cent VAT on solar panels or modules in addition to existing 5 per cent advance income tax.
Imposition of taxes on the items will increase the cost of solar power and will discourage people from adopting solar home systems.
It will also hamper the government’s initiative to increase production and use of green and renewable energy.
In the letter, the Power Division said that the government had set a target of producing 2,000 megawatts of renewable energy sources which is 10 per cent of the total required power by 2020.
The division has taken various plans to meet the government’s goal of producing renewable energy.
Solar power is considered to have the most potential of any renewable energy source, it said, adding that around 12 per cent of the total population is getting electricity from 52 lakh solar home systems across the country.
The government is also implementing a set of projects, including solar irrigation, solar mini grid, solar rooftop project and large solar park, to increase production of electricity from the source.
Nine hundred and ninety nine solar irrigation pumps, 15 mini-grids and 25 megawatts capacity solar rooftop have already been established.
It is important to keep imports of solar panels or modules and solar cells tax-free to achieve the targets of the government, the letter stated.
Earlier on June 28, the Sustainable and Renewable Energy Development Authority (SREDA) of the division made the same request to the NBR.
Solar panel importers and other stakeholders, including Bangladesh Solar and Renewable Energy Association, have also been lobbying with the revenue board for keeping the products VAT-exempted like the previous fiscal.
NBR officials said that they were scrutinising the proposal and would soon make a decision on the issue considering the importance of renewable energy and other issues, like domestic production.