MD ASADUZ ZAMAN

Commercial solar power generation is likely to receive a zero percent income tax benefit in the upcoming budget, while the government is considering a five percent rebate on electricity bills for retail consumers who use solar power.

Besides, the proposed budget for the 2026-27 fiscal year may exempt imports of raw materials used to manufacture lithium-ion batteries, sodium-ion batteries and lithium-ion battery packs from duties and taxes until 2030.

These batteries are widely used in solar power systems. Imports currently face a total tax incidence of about 60 percent.

Finance ministry officials familiar with the matter said a significant share of customs tax incentives in FY27 could be directed towards the solar sector as the government seeks to reduce dependence on conventional energy sources amid volatility in global fuel markets.

As part of its broader green energy agenda, the BNP government is also considering lowering advance income tax on electric vehicles (EVs) during registration and renewal.

The current levy of Tk 2 lakh would be reduced to Tk 25,000, Tk 50,000, Tk 75,000 and Tk 1 lakh, depending on vehicle capacity.

The proposed rates would apply to EVs with capacities of up to 200kW, 300kW, 400kW and above 400kW, respectively.

The government is also considering extending concessional import benefits to local EV parts makers, alongside manufacturers and assemblers.

“Duties on charging stations for e-bikes and EVs may also be reduced in the budget,” said one of the officials.

Finance Minister Amir Khosru Mahmud Chowdhury is expected to announce the measures when he presents the national budget in parliament on June 11.

Officials said the proposals have already received in-principle approval from Prime Minister Tarique Rahman at a high-level meeting last month.

Feroz Kabir, senior general manager of Runner Motors, which sells imported electric scooters, welcomed the proposals, saying they were in line with the global shift towards cleaner transport.

However, he said charging infrastructure remains a major concern.

“Government action will largely shape how EV demand grows,” said Kabir, adding that while most users still rely on home charging, a structured charging network will be crucial for wider adoption.

He said consumer acceptance is rising as vehicle range, comfort and practicality have improved. Although EVs cost more upfront, buyers focus on savings in day-to-day use.

Zakir Hossain Khan, chief executive officer of the Change Initiative, said the government’s green transition efforts should be accompanied by a broader overhaul of renewable energy and EV policies.

He argued that the current tax regime creates distortions and inefficiencies, noting that even low tariffs can lead to complex customs assessments and the risk of misclassification.