The National Board of Revenue in Bangladesh announced it will offer a 15-year tax break for coal-fired power generation in a move aimed at spurring private investment in the nation’s power industry, reports The Daily Star.
According to the article, any company signing a development contract with the government before June 20, 2020 and beginning generation from new coal-fired assets by June 30, 2023 will qualify for the tax waiver.
Bangladesh has in place a strategy to cut its dependence on gas-fired power and increase coal generation through the use of domestic deposits and imports. Currently, coal accounts for 2 percent of total power generation capacity in the country with government goals set to increase that amount up to 24 percent.
The new coal generation tax incentive includes benefits such as a three-year tax waiver for non-nationals working at coal-fired facilities and the elimination of taxes on interest payments for foreign loans.
News of the tax break comes on the heels of the World Bank announcing it would not be offering financial assistance to coal-fired power projects in Bangladesh and other developing countries except in rare cases. The Bank’s new energy strategy instead calls for the scaling up of its work in helping countries develop national and regional markets for natural gas and increasing its support for hydropower.