Pvt power cos get tax waiver until 2019
Doulot Akter Mala | Wednesday, 3 August 2016
The government's revenue authority has extended the tax exemption facility for the private power generation companies by another three and half years, up to December 31, 2019.
The private power generation companies, except the coal-fired ones, that will go for commercial production by the said period will enjoy 15-year tax exemption facility.
Internal Resources Division (IRD) has extended the deadline that expired on June 30 through issuing a Statutory Regulatory Order (SRO) recently.
Officials said the deadline for availing the tax exemption facility was extended on a couple of occasions in the past through issuing SROs. The previous two deadlines ended on December 31, 2014 and June 30, 2013.
As per Income Tax Ordinance 1984, private power plants that will comply with the conditions of the private sector power generation policy of Bangladesh, will be entitled to enjoy the tax exemption on the income generated from the power production business.
Officials said a number of entrepreneurs have shown their interest to invest in power generation, being encouraged by the 15-year tax holiday facility.
The power ministry invited tender by preparing request for proposal (RFP) and offering the tax exemption facility. Many investors responded to the offer.
Bangladesh Power Development Board (BPDB) has signed agreements with different private power companies under the income tax rules with tax exemption facility, they also said.
It is not possible for the ministry to cancel or suspend the existing tender, invite fresh one or cancel existing agreements. The tax authority has extended the timeframe for tax exemption facility considering the issue, they added.
As per the existing income tax rules, foreign employees of the private power companies can enjoy tax exemption for first three years after their arrival in the country.
The power generation companies can also enjoy tax exemption on interest amount of foreign loan, payable royalties, technical know-how and technical assistance fees, and capital gain of the companies, generated following handover of their shares.
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