Power Division and stakeholders have requested the revenue board to reintroduce tax benefit for importing solar panels and cells to facilitate the use of renewable energy.
They have sought exemption from the payment of Value Added Tax (VAT), Advance Trade VAT (ATV) and other forms of taxes on the import of equipment for solar home systems.
In the budget for fiscal year (FY) 2018-19, the National Board of Revenue (NBR) imposed 15 per cent VAT and 5.0 per cent ATV on the import of photovoltaic cells.
It also imposed 15 per cent VAT on solar panels or modules.
In a recent letter, renewable energy wing, under the Power Division, said imposing taxes on the items will increase the cost of solar power.
Earlier on June 28, Sustainable and Renewable Energy Development Authority (SREDA) of the Power Division made identical request to the tax-collecting agency.
Solar panel importers and other stakeholders including the Bangladesh Solar and Renewable Energy Association have also sought the reintroduction of the tax benefit as was offered during the previous fiscal year.
They said the newly-imposed tax will also discourage people from using the solar home systems.
"The government has set a target of producing 2,000 megawatts (MWs) of power from renewable energy sources. It would be 10 per cent of total demand for power by 2020," the division wrote in the letter.
Solar power is considered to be the most potential source of renewable energy.
Around 12 per cent of the total population is getting electricity from 5.2 million solar home systems installed across the country.
In order to increase the production of electricity, the government is implementing a set of projects including solar irrigation, solar mini grid, solar rooftop projects, and large solar park.
Meanwhile, some 999 solar irrigation pumps, 15 mini-grid and 25 megawatts capacity solar rooftop have been installed in different places across the country.
NBR officials said they are actively considering the pleas.
They would take decision in line with the instruction of government high-ups.
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