Income Tax Exemption Policy for Independent Power Producers Under the BOO Model in Bangladesh (2025-2030)

Under the powers granted by Section 76, subsection (1) of the Income Tax Act, 2023 (Act No. 12 of 2023), and subject to certain conditions, the National Board of Revenue is providing an income tax exemption under the Private Sector Power Generation Policy of Bangladesh to independent power producers who operate under the Build Own Operate model. This exemption applies to all companies that commence commercial production by 1 July 2025, and continues until 30 June 2030. Initially, a 100% exemption applies, which is gradually phased out over a period of time, as follows:

Tax Exemption Periods and Rates:

• For the first five years after the start of commercial production (Years 1, 2, 3, 4, and 5): 100%
• For the next three years (Years 6, 7, and 8): 50%
• For the following two years (years 9 and 10): 25%

All conditions specified in the Private Sector Power Generation Policy of Bangladesh must be fulfilled, and companies must operate in accordance with the provisions outlined in that policy. This order enters into effect from 1 July 2025.