BPDB wants source tax exemption on bulk power purchase, sales
BPDB sent a letter to the tax authorities through the Power Division of the Ministry of Power, Energy and Mineral Resources, raising the demand to avoid electricity price hike at both bulk and retail levels
The Bangladesh Power Development Board (BPDB) has asked the National Board of Revenue (NBR) to waive the source tax on bulk electricity purchase from producers and sales to distribution companies.
Recently, the BPDB sent a letter to the tax authorities through the Power Division of the Ministry of Power, Energy and Mineral Resources, raising the demand to avoid electricity price hike at both bulk and retail levels.
Confirming the issue, Md Habibur Rahman, secretary of the Power Division, told The Business Standard that NBR had not replied to their request.
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As the sole buyer of electricity, the BPDB purchases electricity from independent power producers, public power generation companies and also imports it from India.
Some 6% source tax is being charged on these purchases.
From the ongoing fiscal year, another 6% source tax was introduced on the wholesale sales of the electricity to distribution companies. For these, the BPDB has been incurring losses.
The power department has requested the NBR chairman in a letter to take necessary steps to exempt the source tax from the wholesale electricity bill as there is no profit in the sale of wholesale electricity and PDB is a loss-making company.
Contacted, NBR Chairman Abu Hena Md Rahmatul Muneem told TBS that he was not informed about the letter.
Some BPDB officials said as a service sector, electricity was sold at the price fixed by the Energy Regulatory Commission (BERC), without taking profit into consideration as per government guidelines.
The agency is counting losses every year as it buys electricity at a higher price and sells it at a lower price. As a result, it has incurred a loss of Tk62,000 crore till the 2019-20 financial year.
Last year, the BPDB received a subsidy of Tk11,700 crore from the government. This year it could exceed Tk16,000 crore due to high production cost driven by increased fuel oil price.
In the meantime, it will be difficult to cope with the pressure to pay additional taxes.
