Bangladesh's government has introduced a 10-year tax exemption package for renewable energy plants, including solar arrays, effective July 1, 2025.
The National Board of Revenue (NBR) has issued a notification granting 100% tax exemption for the first five years, 50% for the next three years, and 25% for the following two years for renewable energy projects.
These new tax breaks will apply to power plants that begin commercial operation between July 1, 2025, and June 30, 2030.
“Power plants which will be constructed under build-own-operate (BOO) method under the Private Sector Power Generation Policy of Bangladesh will enjoy the tax holiday benefit,” NBR Chairman Abdur Rahman Khan wrote in the notification. “They will have to meet all the conditions of the power generation policy and have to be operated according to the policy guidelines.”
In June 2023, the previous government withdrew full tax exemptions for the renewable energy sector, which created fears among investors. Since then, both local and foreign investors had been repeatedly asking to reinstate the tax exemption.
M A Taher, executive member of the Bangladesh Solar and Renewable Energy Association (BSREA), told pv magazine that the new tax package will bring immense benefits for utility-scale power plants and attract fresh investment in the sector.
“The tax exemption will help the independent power producers to lessen production cost thus power tariff will go down,” he said.
However, Taher has urged the government to grant tax exemptions for the rooftop, irrigation pump, and floating solar segments, due to the currently high tax burden for such projects.
Bangladesh has a total clean electricity generation capacity of 1.38 GW, with 1.08 GW generated from solar power.
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