Power Division of the power, energy and mineral resources ministry has sought income tax holiday for 15 years for the private power generation companies which will go into commercial operations after December 31 this year.
According to the existing statutory regulatory order, private power plants, except coal-based ones, should go into commercial operations by December 31, 2019 for getting complete income tax exemption for 15 years up to 2034 and a set of other fiscal incentives for various periods.
There is another tax incentive package of income tax exemption at gradually reducing rates for 10 years for the power plants which will come into commercial operations between January 1, 2020 and December 31, 2024.
But the Power Division in a recent letter requested the National Board of Revenue for extension of the existing deadline for commercial operations, which is scheduled to expire on December 31 this year, so that the power plants in the pipeline could avail income tax holiday and other benefits.
In the letter sent on December 3, the division said that the deadline should be extended to check the price hike of electricity by the Power Development Board as the board could purchase electricity at lower price from the private power plants.
Officials said that private power plants that would come into operations after December 31 did not want to avail the tax benefit at reduced rate offered by the NBR. So, the division made the request as a significant number of private power plants failed to come income commercial operations by the expected commercial operation dates.
The government has also achieved significant improvement in power generation.