As a tax barrister I have advised on and been involved in green tax incentive schemes but today, tax fans, I bring news which is totally contra to the current Tax-Zeitgeist.
Bangladesh has announced that it will offer new coal-fired power generation projects tax holidays of up to 15 years from the date production commences. There is a target of 24% coal fired energy generation although at the moment only 2% is from coal fired power stations.
The National Board of Revenue in Bangladesh revealed that a corporation tax exemption will be given if an investing company completes a contract to build a coal-fired facility before June 2020 and then generates power from it by June 2023. Also in the tax bundle of incentives and exemptions are income tax exemptions for some categories of workers for 3 years, exemptions relating to tax on foreign investment loans, capital gains accrued on power generating plant, royalties and technical expertise. It is unclear to me whether VAT is also in this bundle.
I find this news a little surprising since the rest of the world is actively reducing its financial assistance for new coal-fired power generation projects.
Let’s see what the general response to this is.
Tax Barrister, Accountant