NBR cancels indefinite tax exemption on loan interest for S Alam power plant
No entity other than the S Alam Group has been granted such extensive tax privileges in the past
The National Board of Revenue (NBR) has revoked the indefinite tax exemption on loan interest for SS Power Limited, a subsidiary of the controversial S Alam Group.
A statutory regulatory order (SRO) issued on 17 December stated that the exemption, which has been in place since March 2019, will end in January next year.
The SS Power Plant, based in Chattogram, also previously enjoyed duty-free imports of machinery and equipment. NBR officials noted that no other entity has received such extensive tax privileges.
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Ocean-going ships also lose tax exemption
In a separate order on the same day, the NBR removed the tax exemption on foreign earnings of Bangladeshi-flagged ocean-going ships. Ship owners must now pay a 3% source tax on foreign currency earnings from services provided by their ships.
There are approximately 100 Bangladeshi-flagged ocean-going ships in operation. An NBR official estimated that this tax could generate around Tk100 crore annually.
This decision follows pressure from the International Monetary Fund (IMF), which has urged the NBR to withdraw tax exemptions granted to various businesses.
Earlier this month, an IMF delegation revised the revenue collection target, requiring an additional Tk12,000 crore to achieve a 0.5% increase in tax-to-GDP ratio during the current fiscal year.
