High import duties barrier to renewable energy sector: Dr Atiur

Favourable tax policy for the growth of the renewable energy sector is pivotal for realising the prime minister’s vision of sourcing 40 per cent of the country’s energy need from renewable sources, said Dr Atiur Rahman, former governor of Bangladesh Bank.

The high import duties and taxes currently imposed on input solar energy systems are creating a serious barrier, he said.

The former central bank governor and also an emeritus professor of the University of Dhaka Dr Atiur Rahman said this on Monday while chairing a pre-budget seminar titled ‘Favorable tax policies for renewable energy sector in the National Budget’.

The panel discussants in the session organised by Unnayan Shamannay were BIBM Faculty Member and green finance expert- Khondker Morshed Millat, Director of the Institute of Energy, University of Dhaka- Dr Nasif Shams, and internationally acclaimed renewable energy entrepreneur Dipal C Barua.

Representatives from think tanks and civil society organisations along with media professionals and renewable energy sector stakeholders participated in the discussion session, says a media release.

Dr Atiur further pointed out that removing the duties and taxes imposed on inputs such as solar inverters and solar panels may reduce the cost of installing solar system by 8 to 11 per cent.

Considering these, he believes, these taxes and duties should be completely removed or at least significantly reduced in the coming National Budget with the intention of promoting solar energy in Bangladesh.

Khondker Morshed Millat added that without the right set of tax incentives solar energy entrepreneurs will not be able to capitalise on the available green finance from commercial banks and NBFIs.

Tax incentives must be ensured to reduce prices of solar energy systems which in turn will increase the demand for solar energy in Bangladesh to a significant extent, said Dr Nasif Shams.

He further added that with the desired level of increase in demand for solar energy, local entrepreneurs may even be interested to produce the said inputs domestically.

Products imported for renewable energy must not be equated with other imports, said Dipal C Barua.

While the government may lose some revenue by exempting all duties and taxes on solar energy-related imports, the possible reduction in fossil fuel expenses due to the expansion of solar energy will much higher- he added.