The Cabinet has approved a proposal to provide customs duty and tax exemptions for the import of machinery and equipment required for setting up renewable solar power plants. The approval came at the 20th Cabinet meeting held at the Cabinet Room of the Jatiya Sangsad Bhaban with Prime Minister Tarique Rahman in the chair. The exemption will be in effect for six months from the date of issuance of the relevant notification and will cover customs duty exceeding one percent, regulatory duty, supplementary duty, value-added tax, advance tax, and advance income tax.
Significance of Solar Tax Exemptions
The measure is expected to facilitate the faster installation of solar power plants, helping meet the growing electricity demand, reduce power shortages, support uninterrupted industrial production, lower production costs, and reduce damage to machinery. This will have a positive impact on investment and economic activities. Bangladesh has been increasingly focusing on renewable energy sources to meet its energy needs sustainably. Solar energy, in particular, has shown significant potential due to the country's geographical location and abundant sunlight.
Hong Kong Investment Agreement
The Cabinet also approved a proposal to sign a Promotion and Protection of Investment Agreement between Bangladesh and Hong Kong. Hong Kong is one of the world's developed and open economic regions and ranks sixth among the sources of foreign direct investment in Bangladesh. The proposed agreement is expected to strengthen existing economic ties between the two sides and help attract new investment, particularly in sectors including garments and textiles.
This agreement will also help promote industrialisation, employment generation, technology and knowledge transfer, and enhancement of production capacity by ensuring necessary security and protection for investments from both sides. The agreement, once signed, will establish an institutional framework to facilitate increased foreign investment flows between Bangladesh and Hong Kong and contribute to expanding trade and overall economic cooperation. The agreement will remain valid for 10 years, with a provision allowing the two sides to amend it three years after its signing.
