Government's revenue authority turned down the relevant ministry's proposal for duty waiver to woo large investment into the country's power sector, officials said.
Tax-exemption 'culture' has to be phased out, the National Board of Revenue (NBR) said in regretting the pleas from the ministry of power and energy.
The proposal came after the ministry sought opinion of the NBR while reviewing whether the existing laws, including the Bank Company Act 1991, stand in the way of making large-scale investment in the fund-guzzling power sector.
The ministry also wanted to know whether the NBR could consider any exemption for Bangladesh Power Development Board (BPDB) on payment of 2.5 per cent customs duty from rental payments throughout the contract period.
Responding to the queries, customs wing of the NBR said the BPDB will have to pay the Customs Duty (CD), for any rental power plant, on each rental-bill payment at the customs house concerned.
The ministry has proposed allowing import of high-speed diesel (HSD) for public and private power plants without paying customs duty, Value Added Tax (VAT) and other taxes.
Responding to the package proposals, the Customs said import of HSD oil that would be used in power plant is not exempt from paying customs duty.
On the duty-waiver proposals for import of steel and plate as power plant equipment, the customs wing suggested the industries should use locally manufactured steels.
"There is local production of steel plate. One of the major mandates of tax policy is to protect the local industry," the customs policy wing reminded.
As per instructions of the finance minister, the NBR is trying to come out from the tax-exemption culture, it further said on the note of dissent.
The line ministries will have to pay all of the taxes and duties on import of equipment and spare parts for government projects, it added.
The relevant ministries can propose to the ministry of finance allocation of funds for payment of duty-taxes.
"Both public-and private-sector power plants can import erection material, machinery and spares without paying duty," it added.
Customs officials said the government had already offered a fat package of incentives for encouraging investment in power plants.
