A reduction in tax burden for imports of equipment and components necessary for solar power plants has been implemented in Bangladesh to increase production of renewable energy amid an energy crisis in the country.
Tax burden lowered to 1%
According to the National Board of Revenue (NBR), importation of solar power equipment will be subjected to just 1% customs duty without other duties and taxes being imposed. The concession will continue for 180 days since the issuance of the gazette notification. Prior to the new decision, although some exemptions were made in the budget of 2026-27, solar equipment imports still bore a total tax burden of about 17%, comprising 15% VAT and 2% advance income tax.
Importers of commercial goods
Moreover, the new tax facility extends to commercial importers, ensuring that those engaged in supplying solar equipment are able to benefit from the tax cut. Importers of equipment necessary for installation of solar power plants would be eligible under the new policy. These include solar panels, inverters, batteries, and mounting racks, among others.
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Cut in cost of solar plants
It is anticipated that the tax reduction will contribute to reducing the cost of installing solar plants. Thus, importers of renewable-energy equipment will benefit from lower import tariffs. According to the NBR, the measure was introduced in order to boost solar power generation, increase the share of renewable sources, reduce the dependence on fossil fuels, and improve the energy security and sustainable development of the country.
Pressure on renewable energy
The decision is made in response to the high cost of energy and problems with electricity supply in the country. The government has been seeking opportunities for boost the development of solar generation in order to become less dependent on imported energy sources. As Reuters reports, Bangladesh plans to install 10,000 MW of solar power over the next five years.
