Bangladesh has introduced a comprehensive “Going Green” fiscal strategy in its latest national budget, placing environmental sustainability at the center of industrial development, investment promotion, and long-term economic planning. The initiative aims to accelerate the country’s transition toward clean energy, electric mobility, and sustainable manufacturing through an extensive package of tax incentives and policy support.
Under the new framework, the government has extended major duty exemptions for semiconductors, batteries, consumer electronics, electric vehicle (EV) components, and electric buses until fiscal year 2030-31, providing investors with long-term policy certainty and encouraging green industrial investment.
Renewable energy has emerged as a key beneficiary of the strategy. Import duties and taxes on solar inverters, lithium-ion batteries, solar photovoltaic modules, and mounting structures will be significantly reduced or completely waived. In addition, income from solar power generation will remain tax-free until 2035, while consumers using solar electricity will receive a 5 percent tax rebate, aimed at promoting both rooftop solar installations and utility-scale renewable energy projects.
The budget also introduces one of the country’s most extensive support packages for the electric vehicle ecosystem. Incentives cover EV manufacturing, battery production, charging infrastructure, and electric public transportation. Import duties on EV charging equipment will be reduced from 39.75 percent to zero, while advance income tax on EV registration will be substantially lowered.
To further encourage electric mobility, the total tax burden on imported electric vehicles priced up to $25,000 will fall from 93 percent to 64 percent. Conversely, taxes on conventional petrol and diesel-powered vehicles with engine capacities between 1,200cc and 1,600cc will increase from 132 percent to 156 percent, reflecting the government’s commitment to reducing fossil fuel dependence.
Local EV manufacturing has also received significant support. Companies involved in vehicle assembly, welding, painting, and body manufacturing will benefit from extensive tax exemptions, while raw materials for lithium-ion and sodium-ion battery production will enjoy full tax exemptions until June 2030. Incentives have likewise been expanded for electric motorcycle and component manufacturers to strengthen domestic micro-mobility supply chains.
Beyond industrial measures, the government announced broader environmental initiatives, including a target to plant 250 million trees over the next five years, a programme expected to create approximately 350,000 green jobs. Efforts to improve air quality monitoring, establish modern vehicle inspection centres, strengthen e-waste management, and reduce plastic waste through a national 3R (Reduce, Reuse, Recycle) strategy have also been included in the plan.
The new budget signals a strategic shift in Bangladesh’s fiscal policy, positioning taxation not only as a revenue-generating tool but also as a mechanism for promoting sustainable development, energy security, environmental protection, and green economic growth.
