As governments across Asia continue to adjust fiscal policies to support cleaner energy and transportation systems, environmental rights groups have welcomed customs duty and tax exemptions for renewable energy, solar equipment, and electric vehicles (EVs) proposed in Bangladesh's national budget for the 2026-27 fiscal year.

In a joint statement, ActionAid Bangladesh and the Just Energy Transition Network Bangladesh (JETnet-BD) said the measures could support the country's energy transition and reduce reliance on imported LNG and liquid fuels.

The government has included the energy sector among the ten priority sectors in the proposed budget, with the objective of promoting a non-discriminatory and inclusive economy. The budget wants to meet the national targets of generating 20% of total electricity from renewable sources and producing 10,000 MW of solar power by 2030.

Reflecting the strategic importance of the sector, the allocation for the power and energy sector has been proposed at BDT 173.4 billion (US$ 1.4 billion), marking a substantial increase from the previous fiscal year's allocation of BDT 169.52 billion.

"The strategic withdrawal of fiscal incentives for items like mounting structures, lithium cells, battery packs, and Battery Energy Storage Systems (BESS) after 30 June 2028 will effectively encourage local backward linkage industries and domestic manufacturers," read the statement.

The decision to retain a zero% tax rate until 2035 to incentivize cost-effective and green solar power production is exemplary. "Additionally, introducing a 5.0% tax rebate for consumers against their solar electricity bills will decisively boost grassroots solar adoption and develop a people-centric energy sector."

Massive duty cuts on EV imports and charging infrastructure valued up to USD 25,000 from 93% to 64%, alongside a complete reduction of the total tax rate on EV chargers and charging stations from 39.75% to zero, will ensure a nationwide transition towards eco-friendly mobility.

Furthermore, reducing the advanced income tax for BRTA registration and renewal of EVs from BDT 200,000 to a tiered structure, ranging from BDT 25,000 to BDT 100,000 based on motor capacity, is a massive stride forward, added the statement.