Retail power price may rise by 10pc

15pc VAT on electricity bill proposed in budget rings alarm bells

Retail electricity prices may increase by 10 per cent, as the finance minister has imposed a 15 per cent value added tax (VAT) on electricity bills from 1 July. Consumers currently pay 5 per cent VAT. However, according to the National Board of Revenue (NBR), if the government adjusts the basic power price with the electricity bill, the power price would not increase. “Yes, the consumers of electricity will have to shell out 15 per cent VAT on the bill. But the Bangladesh Power Development Board (BPDB) and power distribution companies would get rebates at the end of the day. Hence, the price of power would not go up,” Barrister Jahangir Hossain, NBR’s member (VAT), yesterday told The Independent.
BPDB chairman Engineer Khaled Mahmud expressed concern over the issue. “We are really worried over the 15 per cent VAT imposed on the electricity bill. If that occurs, we would face problems. In the context of this situation, we have convened an urgent meeting for Saturday, a holiday. From that, one can understand how important the issue is for us,” the chairman told The Independent.
Sources said if the VAT is imposed on electricity, the government will collect an extra Tk. 3,100 crore from the consumers. The government has also increased the gas bill from this month. Within a month, consumers would have to pay an extra 10 per cent on their electricity bills.
“This is one kind of exploitation by the government. The government only knows how to increase utility bills but not to improve the services. If we continuously face such tax increases like that of VAT, how can we—as individual citizens—be financially healthy? We will remain poor,” sighed a resident of Paltan in the capital.
Power sector officials said they were concerned about the VAT as they would not get the money. The money would go into the NBR’s account, they pointed out.
“The power distribution companies have submitted some proposals to hike power prices and the proposals are pending with the Bangladesh Energy Regulatory Commission (BERC). Hence, at this juncture, the VAT issue would hamper the proposals,” said a BPDB official.
A BPDB official said if VAT was imposed from July, the consumers would have to fork out an extra Tk. 0.67 per unit. The cost of power supply is Tk. 6.92 per unit and the billing rate is Tk. 6.73 per unit. Thus, the BPDB would get more money from consumers.

Retail power price may rise by 10pc

15pc VAT on electricity bill proposed in budget rings alarm bells

Retail electricity prices may increase by 10 per cent, as the finance minister has imposed a 15 per cent value added tax (VAT) on electricity bills from 1 July. Consumers currently pay 5 per cent VAT. However, according to the National Board of Revenue (NBR), if the government adjusts the basic power price with the electricity bill, the power price would not increase. Yes, the consumers of electricity will have to shell out 15 per cent VAT on the bill. But the Bangladesh Power Development Board (BPDB) and power distribution companies would get rebates at the end of the day. Hence, the price of power would not go up, Barrister Jahangir Hossain, NBRs member (VAT), yesterday told The Independent. BPDB chairman Engineer Khaled Mahmud expressed concern over the issue. We are really worried over the 15 per cent VAT imposed on the electricity bill. If that occurs, we would face problems. In the context of this situation, we have convened an urgent meeting for Saturday, a holiday. From that, one can understand how important the issue is for us, the chairman told The Independent. Sources said if the VAT is imposed on electricity, the government will collect an extra Tk. 3,100 crore from the consumers. The government has also increased the gas bill from this month. Within a month, consumers would have to pay an extra 10 per cent on their electricity bills. This is one kind of exploitation by the government. The government only knows how to increase utility bills but not to improve the services. If we continuously face such tax increases like that of VAT, how can weas individual citizensbe financially healthy? We will remain poor, sighed a resident of Paltan in the capital. Power sector officials said they were concerned about the VAT as they would not get the money. The money would go into the NBRs account, they pointed out. The power distribution companies have submitted some proposals to hike power prices and the proposals are pending with the Bangladesh Energy Regulatory Commission (BERC). Hence, at this juncture, the VAT issue would hamper the proposals, said a BPDB official. A BPDB official said if VAT was imposed from July, the consumers would have to fork out an extra Tk. 0.67 per unit. The cost of power supply is Tk. 6.92 per unit and the billing rate is Tk. 6.73 per unit. Thus, the BPDB would get more money from consumers.