POST TIME: 15 January, 2020 02:57:38 AM
Private power generation firms to get tax exemption

Private power generation firms to get tax exemption

Power generation companies in the private sector will receive tax exemption soon, according to a source in the Internal Resources Division (income tax) under the finance ministry.

Three major private power generation companies—Summit Meghnaghat II Power Plant, Unique Meghnaghat Power Limited (UMPL), and Chandpur Power Gene-rations Limited, a subsidiary of Doreen Power Generations and Systems Limited—are expected to get the benefit.

The source said that as per a Statutory Regulatory Order (SRO) issued on January 9, the government is to give income tax exemption to private power generation companies under Section 44 of the Income Tax Ordinance 1984. The initiative has been taken to attract investment in the power sector.

According to the SRO, if private power generation companies can meet the conditions laid down in the ‘Private Sector Power Generation Policy of Bangladesh’ and start commercial production from January 1, 2020 to December 31, 2022, they will receive the exemption facilities.

It also mentioned that coal-based power generation companies will not receive this facility.

Private power companies will get other facilities along with tax exemption, said an NBR source.

“These companies will get income tax exemption on their earnings from power generation business from its commercial production date to December 31, 2034,” the source said.

“Income tax exemption up to three years will be given to foreign technicians employed in industries specified in the relevant schedule of the income tax ordinance,” the source added.

“Power generation companies will get exemption on foreign loans taken by the company. Tax exemption will also be given on the royalties and technical know-how fees received by any foreign collaborator, firm, company and expert,” it also said.

“Tax exemption will also be given on capital gains from the transfer of shares of public limited companies listed on a stock exchange,” the source added.

When asked how many companies would get this facility immediately, the source said that three major power generation companies were expected to get these facilities as their power plants were to begin commercial operation within the expected timeframe (by 2022).

“Summit Meghnaghat II Power Plant is a combined cycle gas turbine power plant under construction at Meghnaghat of Sonargaon, Narayanganj, with an installed capacity of 590-MW. The expected commercial operation timeframe of this plant is March 2022. Summit is to get the facilities if it can start the commercial operation in due time,” the source explained.

“Unique Meghnaghat Power Limited (UMPL), a 584-MW gas-fired combined cycle power plant, is under construction at Meghnaghat of Sonargaon, Narayanganj, is also expected to start commercial operation by the same timeframe. It would get the facilities in that case,”

it said.

“Chandpur Power, a subsidiary of Doreen Power, a 115-MW plant under construction, is expected to commence its commercial operation in the current financial year. It would receive the facilities if everything goes according to the plan,” it added.