The power plants will have to pay source tax from next fiscal year against their sale of electricity as the finance minister proposed the new tax measure at 6.0 per cent Thursday.
Earlier, the source tax was applicable only to rental power plants.
The new tax measure will, however, not be applicable to those power plants that are enjoying tax holiday for 15 years after initiation of electricity generation.
This source tax will be applicable to them after the tax holiday period is over.
However, the power and energy sector has seen a meagre 2.71 per cent increase in allocation to Tk 274.84 billion for the 2021-22 fiscal year, compared to 12 per cent growth in the size of the annual outlay.
However, the allocation of Tk 267.58 billion for the sector in the current (2020-21) budget was 4.60 per cent lower than the previous (FY 20) year's allocation of Tk. 280.51 billion.
Proposing the next budget on Thursday, the finance minister projected that the country's overall electricity generation capacity would rise to 57,972 megawatt (MW) within several years should all the power plants the government has initiated to build, come into operation.
The country's total electricity generation capacity stood at 25,227 MW as of May 2021.
The finance minister added that a total of 32,745 MW electricity would be added to the present capacity as 38 power plants with a capacity of 14,115 MW are under construction, and contracts have been signed for construction of another 20 plants for producing 2,961 MW electricity.
Besides, six power plants with a capacity of 650 MW are in the process of tender, and proposal for construction of 33 plants with a capacity of 15,019 MW has been approved.
The country's overall electricity generation increased five-fold over the past 12 years since 2009, the minister mentioned.
He also claimed that the systems loss in electricity has come down from 14.33 per cent to 8.73 per cent, thanks to the strict measures taken by the government.
Around 99 per cent of the population is said to have come under the electricity coverage.
The government has a plan to increase the number of transmission lines to 28,000 kilometres and the number of distribution lines to 660,000 km by 2030, said the finance minister.
Also, natural gas production from local fields increased by 44 per cent over the past 12 years to 2525 million cubic feet per day (mmcfd) as of May 2021 from 1,744 mmcfd in 2009.
To meet the mounting natural gas demand the government has started importing LNG (liquefied natural gas) in 2018.
Two floating LNG terminals with a total capacity of 1,000 mmcfd are already operational and construction plan of one 1,000 mmcfd capacity LNG-based LNG terminal has already been initiated.
The country's fuel storage capacity, however, increased by only 32.27 per cent to 13.20 million tonnes as of May 2021 from 894,000 tonnes in 2009.
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