Solar equipment import tax cut to 1% to help renewable energy

Solar power - Infrastructure Development Company Limited (IDCOL).

Dhaka, Sept 16 - The National Board of Revenue (NBR) has further cut the tax on imports of equipment and parts used for solar power generation to 1% to facilitate the expansion of renewable energy.

Under a notification issued Wednesday, importers will be exempted from customs duty above 1%, regulatory duty, supplementary duty, value-added tax (VAT), advance tax and advance income tax on specified solar power-related equipment and parts.

The facility will remain effective for 180 days from the date of issuance of the notification.

The NBR said the latest measure was taken against the backdrop of the global energy crisis and electricity shortages, with a view to expanding solar power generation rapidly.

In the national budget for the 2026-27 fiscal year, the government had already exempted key solar power-related equipment from import duty, regulatory duty and advance tax through SRO No. 159-Law/2026/14-Customs, issued on June 8, 2026.

Following that exemption, imports of the equipment were subject to a total tax burden of 17%, comprising 15% VAT and 2% advance income tax.

The latest decision will bring the total tax burden down to 1%.

The NBR also extended the facility to commercial importers, who were previously excluded from the tax benefits for importing solar power-related equipment and parts.

Commercial importers will receive the exemption from duties and taxes beyond the 1% customs duty, subject to specified conditions, for 180 days from the date of issuance of the notification.

The NBR said the measure will help reduce the cost of solar power projects and speed up the addition of new electricity generation capacity.

It also expects the move to reduce dependence on fossil fuels and strengthen the country’s energy security and sustainable economic development. - UNB