STAFF CORRESPONDENT

Bangladesh’s tax structure favours fossil fuels over renewable energy technologies, imposing significantly higher duties on clean energy equipment while offering lower tax burdens on fossil fuel imports and power plants, said a study by the Centre for Policy Dialogue (CPD).

This practice thereby creates discrimination in the competition, said the study, released by the private think tank yesterday at its Dhanmondi office.

It found that the imported liquefied natural gas (LNG) enjoys the most favourable tax treatment among major energy categories, facing a total tax incidence of only 9.5 percent.

In contrast, solar panels, batteries, grid equipment, and electric vehicles -- technologies considered critical for integrating renewable energy into the power system -- face effective tax rates ranging from 61 percent to 93 percent.

Most of the fossil-fuel based plants’ equipment face 15 percent Value Added Tax and 7.5 percent Advance Tax while the renewable energy technologies face multiple layers of customs duties, supplementary duties, advance income tax, and Regulatory Duty in top of the VAT and AT, the study found.

A VAT rate of only 6 percent on LNG imports is artificially making the fuel more lucrative than other energy sources, said the study.

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