By Doulot Akter Mala
The National Board of Revenue (NBR) is formulating strategies to offer tax benefits to coal-fired power plants to encourage both foreign and local investments to meet the country’s growing demand for power.
The revenue board Tuesday held a meeting with the senior officials at the power and energy ministry to find out fiscal measures for coal-fired power plants.
A senior NBR official said the revenue board was working on the issue so that it could come up with tax benefits in the upcoming fiscal budget for investment in coal-fired power plants.
“We believe tax benefits will play a major role in attracting investment to this sector,” he added.
Under the existing income tax rules, investors of the power plants are entitled to enjoy 15 years’ tax exemption if they start power production within June 30, 2013.
Earlier, the government had moved to extend the time for power generation to 2016 as it signed several agreements with power companies which would not be able to generate power by the time-frame given.
The official said the tax benefit facilities may continue until this fiscal year as the authorities are yet to issue any order extending the time.
He said the tax authorities were mulling to offer some special facilities to the coal-fired plants along with the existing ones.
The country’s lone coal-fired power plant at Barapukuria has a capacity to produce 250mw (megawatt) power.
A joint venture under Bangladesh-India Friendship Power Company Ltd. (BIFPCL) is expected to set up a 1,320mw coal-fired power plant at Rampal in Bagerhat district.
The $1.5 billion coal-fired power plant is likely to be operational by end of 2016.
The state-owned Power Development Board (PDB) of Bangladesh and National Thermal Power Corporation (NTPC) of India are the partners of the joint-venture BIFPCL, formed in January 2012.
Earlier, the state-owned company of India — National Thermal Power Corporation (NTPC) sought tax exemption facilities on profit of sells of power that would be generated in the joint venture power plant at Rampal in Bagerhat district, near the Sundarbans mangrove forests.
The country will require 34,000mw of power by the year 2030 in order to attain 8.0 per cent economic growth rate, according to Bangladesh Power Sector Master Plan.
Currently, all the generation plants in the country have a power generation capacity of 6,350mw.
The PDB can supply 5500mw of electricity against the demand for more than 6500mw a day.
The government is encouraging investment in coal-fired power plants in a bid to reduce dependence on gas that is depleting fast. At present, majority of the power plants use natural gas as fuel for power generation.
However, environmentalists have strongly opposed coal-fired power plants to protect the environment as they found the project hazardous.
Source: The Financial Express