Why tax solar panels?

It is befuddling why the National Board of Revenue (NBR) has decided to slap value added taxes that would amount to a 27 percent levy, on the import of solar panels. This is at a time when Bangladesh is set to explore and develop its solar power possibilities through numerous projects. These include solar home systems, solar irrigation and solar power plants in various parts of the country. So far most of these projects have been successful and offer an exciting alternative to non-renewable energy sources that have already wreaked havoc on our environment.

So when it is obvious that we need to expand our solar power projects, why has the NBR decided to impose this punishing tax on the import of solar panels? Apparently it is to protect local producers. But at a time when we need to accelerate our solar power development to meet part of the exponential demand for energy in our country, protectionist policies are hardly the way to go. The fact is that locally we cannot produce solar panels fast enough and at prices that will be cost effective. The only way we can maintain the pace of growth of this energy source in multiple arenas is by importing the solar panels at affordable prices. The 27 percent levy will basically become a disincentive for those trying to develop solar power for various uses. To give an idea of the impact of this punitive tax: Around 52 lakh solar home systems that cater to 12 percent of the total population in off grid areas will become less affordable. So will the 999 solar irrigation schemes and mini-grids that have already been established. It will discourage innovations like installing solar panels on a school's roof so that children can charge solar lamps at school and take them back home where there is no electricity.

Thus, given the need and demand for solar power, not to mention the benefit of having a continuous green energy source, this levy is counterproductive to say the least.