In May last year Fortum India, a subsidiary of a Finnish solar developer, won the bid for a solar power project in the state of Gujarat. The project was due to be completed three months ago and would have generated enough electricity for 200,000 homes. But like many other solar power projects in the country, it's been delayed as Fortum India struggles to source and pay for necessary components. “For the last six months, we have not been able to finish developing any new projects,” said Manoj Gupta, who oversees Fortum India's solar projects in India. Gupta said solar panels and cells have become obstructively expensive because of protective taxes the Indian federal government implemented in April last year. The basic customs duty imposes a levy of 40% on imported solar modules and 25% on solar cells. The government says it wants to encourage the domestic manufacture of components required to produce solar power and reduce the country's reliance on imports. Read more: Bangladesh, India don’t compete with each other in garment sector, says BGMEA President But solar developers say homegrown producers, while rapidly growing and being pushed along by policy initiatives, are still too fledgling to meet demand. Current cell and module manufacturing capacity in India is around 44 gigawatts per year, just a fraction of what's needed to meet India's renewable aims. In 2022, India had a target to install 100 gigawatts of solar energy as part of goal to add 175 gigawatts of clean electricity to its grid. But only 63 gigawatts of solar power were ultimately installed last year, according to Indian federal government data. India missed its 2022 renewable energy target by just nine gigawatts. “Without these duties we would have easily achieved our targets for larger solar projects, at least,” said Jyoti Gulia of the renewable energy research and advisory firm JMK Research. Most solar developers in India and around the world rely on China, with the nation producing more than 80% of the world's solar components, according to the International Energy Agency. Many countries have tried to encourage domestic production to limit dependence on the country. The United States' recent climate law, for example, also incentivizes homemade renewable energy manufacturing. “China controls the market and we saw during both the pandemic and the geopolitical conflict between our countries that they just stopped the supply chain completely,” said Chiranjeev Saluja from the Indian solar manufacturer Premier Energies. “I think the government wants to develop the whole solar ecosystem, that is the intent behind such policies.” Saluja added that a bustling solar manufacturing industry also had wider economic benefits. “The jobs in manufacturing are well-paying, secure jobs. And while developers employ only a handful of people, to manufacture cells required to produce one gigawatt of solar energy, you will need at least 500 people,” he said. A 2022 report found that India’s renewable energy sector could employ more than one million people by 2030, but only if domestic manufacturing continued to scale up considerably. Another Indian government policy that mandates that solar components can only be bought from government-approved manufacturers to ensure that the modules and cells are of good quality is also stalling projects, according to analysts. Read more: Indian investors can set up industries in Bangladesh through buy-back arrangement: PM Developers are unable to purchase from southeast Asian countries as manufacturers there have yet to be approved or have not applied. Many of those countries have free trade agreements with India which would make them exempt from import taxes. “The situation is quite grim today,” said Vinay Rustagi, managing director at the renewable energy consultancy Bridge to India. “Global supply chain issues, material shortages and, of course, the duty on solar components has led to a lot of projects being postponed.” Rustagi said the growth in domestic manufacturing as a result of the tax is “encouraging, but I do not think it is sustainable.” He added that the government “should be aiming to create strong domestic capabilities that can be a preferred choice without any taxes or duties.” Solar manufacturers do not agree. “We have allowed for dumping from other countries for too long. Otherwise domestic manufacturing would have taken a strong root already,” said Gyanesh Chaudhary, vice chairman at Vikram Solar, an Indian solar manufacturer. “These taxes and policies were announced well in advance and there was enough time to factor them into costs,” Chaudhary said. “Mandates such as the approved list of manufacturers are to make sure the quality of products coming into India are of a certain minimum quality.” But Srivatsan Iyer of solar developer Hero Future Energies said the unpredictability of the sector made it hard to factor in the extra costs. “Land, connectivity to the project site, supply chain issues are just some dynamic factors and, of course, the pandemic,” said Iyer of the difficult landscape for solar projects. “With these duties, clean power is just more expensive for India now.” Iyer is worried that the extra costs could also thwart India's next renewable energy target in 2030. But he's hopeful the government might defer some duties in the upcoming federal budget announcement scheduled for Feb. 1. The government hasn't yet given any indication that it will make amendments to its tax policy.

In a startling turnabout, Senate Majority Leader Chuck Schumer and Sen. Joe Manchin announced an expansive agreement Wednesday that had eluded them for months addressing health care and climate, raising taxes on high earners and large corporations and reducing federal debt. The two Democrats said the Senate would vote on the wide-ranging measure next week, setting up President Joe Biden and Democrats for an unexpected victory in the runup to November elections in which their congressional control is in peril. A House vote would follow, perhaps later in August, with unanimous Republican opposition in both chambers seemingly certain. Just hours earlier, Schumer, D-N.Y., and Manchin, D-W.Va., seemed at loggerheads and headed toward a far narrower package limited — at Manchin’s insistence — to curbing pharmaceutical prices and extending federal health care subsidies. Earlier Wednesday, numerous Democrats said they were all but resigned to the more modest legislation. The reversal was stunning, and there was no immediate explanation for Manchin’s abrupt willingness to back a bolder, broader measure. Since last year, he has used his pivotal vote in the 50-50 Senate to force Biden and Democrats to abandon far more ambitious, expensive versions. He dragged them through months of negotiations in which leaders’ concessions to shrink the legislation proved fruitless, antagonizing the White House and most congressional Democrats.  “This is the action the American people have been waiting for. This addresses the problems of today — high health care costs and overall inflation — as well as investments in our energy security for the future,” Biden said in a statement. He urged lawmakers to approve the legislation quickly. Tellingly, Democrats called the 725-page measure “The Inflation Reduction Act of 2022” because of provisions aimed at helping Americans cope with this year’s dramatically rising consumer costs. Polls show that inflation, embodied by gasoline prices that surpassed $5 per gallon before easing, has been voters’ chief concern. For months, Manchin’s opposition to larger proposals has been partly premised on his worry that they would fuel inflation. Besides inflation, the measure seemed to offer something for many Democratic voters. It dangled tax hikes on the wealthy and big corporations and environmental initiatives for progressives. And Manchin, an advocate for the fossil fuels his state produces, said the bill would invest in technologies for carbon-based and clean energy while also reducing methane and carbon emissions. “Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” Manchin said. Schumer called the bill Congress’ “greatest pro-climate legislation.” He said it would also cut pharmaceutical prices and “ensure the wealthiest corporations and individuals pay their fair share in taxes.” The measure would reduce carbon emissions by around 40% by 2030, Schumer and Manchin said. While that would miss Biden’s 50% goal, that reduction, the measure’s climate spending and the jobs it would create are “a big deal,” said Sen. Jeff Merkley, D-Ore., an environmental advocate who had been upset with the absence of those provisions until now. The overall proposal is far less aspirational than the $3.5 trillion package Biden asked Democrats to push through Congress last year, and the pared-down, roughly $2 trillion version the House approved last November after Manchin insisted on shrinking it. Even then, Manchin shot down that smaller measure the following month, asserting it would fuel inflation and was loaded with budget gimmicks. In summaries that provided scant detail, Democrats said their proposal would raise $739 billion over the decade in new revenue, including $313 billion from a 15% corporate minimum tax. They said that would affect around 200 of the country’s largest corporations, with profits exceeding $1 billion, that currently pay under the current 21% corporate rate. Read:Fed unleashes another big rate hike in bid to curb inflation The agreement also contains $288 billion the government would save from curbing pharmaceutical prices. Those provisions would also require Medicare to begin negotiating prices on a modest number of drugs, pay rebates to Medicare if their price increases exceed inflation and limit that program’s beneficiaries to $2,000 annual out-of-pocket expenses. The deal also claims to gain $124 billion from beefing up IRS tax enforcement, and $14 billion from taxing some “carried interest” profits earned by partners in entities like private equity or hedge funds. The measure would spend $369 billion on energy and climate change initiatives. These include consumer tax credits and rebates for buying clean-energy vehicles and encouraging home energy efficiency; tax credits for solar panel manufacturers; $30 billion in grants and loans for utilities and states to gradually convert to clean energy; and $27 billion to reduce emissions, especially in lower-income areas. It would also aim $64 billion at extending federal subsidies for three more years for some people buying private health insurance. Those subsidies, which lower people’s premiums, would otherwise expire at year’s end. That would leave $306 billion for debt reduction, an effort Manchin has demanded. While a substantial sum, that’s a small fraction of the trillions in cumulative deficits the government is projected to amass over the coming decade. Sen. Kyrsten Sinema, D-Ariz., was still reviewing the agreement, said spokeswoman Hannah Hurley. Sinema backed Manchin last year in insisting on making the legislation less expensive but objected to proposals to raise tax rates, and the spokeswoman referred a reporter to her comments last year supporting a corporate minimum tax. Sen. John Cornyn, R-Texas, said the Democratic agreement would be “devastating to American families and small businesses. Raising taxes on job creators, crushing energy producers with new regulations, and stifling innovators looking for new cures will only make this recession worse, not better.” But if Democrats can hold their troops together, GOP opposition would not matter. Democrats can prevail if they lose no more than four votes in the House and remain solidly united in the 50-50 Senate, where Vice President Kamala Harris can cast the tie-breaking vote. “This agreement is a victory for America’s families and for protecting our planet,” said House Speaker Nancy Pelosi, D-Calif. “In light of the discussions of the past year, this agreement is a remarkable achievement.” The bill lacks increased tax deductions for state and local taxes, which some Democrats from high-tax states have demanded as the price for their support. A spokesperson for Rep. Josh Gottheimer, D-N.J., a leader of that group, did not immediately return a message seeking comment. In the Senate, Democrats are using a special process that will let them pass the bill without reaching the 60 votes required for most legislation there. To use that, the chamber’s parliamentarian must verify that the bill doesn’t violate the chamber’s budget procedures, a review now underway. Schumer and Manchin said leaders committed to revamp permitting procedures this fall to help infrastructure like pipelines and export facilities “be efficiently and responsibly built to deliver energy safely around the country and to our allies.” Sierra Club Legislative Director Melinda Pierce said her group wanted to read the agreement’s details but was glad Biden and Schumer “remained resolute in finding a path to pass once-in-a-generation investments in our communities, our economy, and our future.” Manchin just last week said he would only agree to far more limited legislation this month on prescription drugs and health care subsidies. He said he was open to considering a broader compromise on environment and tax issues after Congress returned from a summer recess in September, an offer that many Democrats considered dubious because of lawmakers’ abbreviated pre-election schedule.

Home Minister Asaduzzaman Khan Kamal on Sunday said the government decided to reduce or withdraw VAT (value added tax) and taxes to keep the prices of some daily commodities, including edible oil, at a tolerable level ahead of Ramadan. “We will announce soon steps on reducing taxes and VAT if necessary and how much on edible oil or sugar or anything else if it is levied on daily commodities,” said the minister at an inter-ministerial meeting held at the Cabinet Division at the Secretariat. However, he did not specify which products will be included in this action. Also read: VAT on import of edible oil, other commodities withdrawn: Minister Briefing reporters after the meeting, Asaduzzaman said, "You know the price of edible oil is rising all over the world. We see prices rising every day which is affecting our country.” “The prices of other commodities can also go up during Ramadan, so we sat down with that in mind,” the minister added. He said, "We are also making arrangements to import electricity keeping in mind the increasing demand during Ramadan." He further said the supply of diesel and gas may be reduced. “We are taking necessary steps to keep these in order so that there is no shortage of electricity and people do not suffer during Ramadan,” he assured. “We will encourage everyone to import the essentials to keep the market stable.” However, the supply of wheat may be another problem as it is imported from Ukraine-Russia, said the minister. “We will continue our efforts to keep the rice and wheat market stable.” The Cabinet Division sat in a meeting with several ministries today to control commodity prices ahead of Ramadan. Also read: Stockpiling of daily commodities for higher profits not acceptable: HC Apart from the home minister, Commerce Minister Tipu Munshi, Agriculture Minister Md Abdur Razzaque, State Minister for Ministry of Power, Energy and Mineral Resources Nasrul Hamid, Cabinet Secretary Khandker Anwarul Islam, Inspector General of Police (IGP) Benazir Ahmed and other top officials attended the meeting.

Prof. Md. Ali Ashraf, a frontline Awami League MP from Cumilla-7, on Sunday said that corruption and money laundering continue despite the government’s vow to stop the vices. Also on Sunday, another senior ruling party MP Mohiuddin Khan Alamgir from Chandpur-1 castigated the budget proposals to impose taxes on the income of private universities and medical colleges. Read: New budget proposals inadequate in tackling poverty, say rights groups Both the legislators were speaking on the Supplementary Budget in the parliament. Ali Ashraf said, “Our heads go down with shame and hate due to some big thieves.” This is not for what the nation had fought the Liberation War, he said. “We took part in the country’s Liberation War not for love for our own lives… not with the hope of getting and enjoying something,” he said. “We had fought in response to the call of Bangabandhu Sheikh Mujibur Rahman to free the people and to see smile on their faces,” he said. Read: New budget underestimated impacts of COVID-19 pandemic, says SANEM He said that although the Prime Minister Sheikh Hasina and her government unequivocally have vowed zero tolerance against corruption and those involved in money laundering, “I think adequate and proper steps should be taken in this regard.” The AL MP also suggested that the government should overhaul the tax administration to increase its efficiency, transparency, honesty and sincerity. “Otherwise, we will not be able to reach our desired destination.” Lawmaker Muhiuddin Khan criticized the government for imposing tax on the income of private universities and medical colleges in the budget for fiscal 2021-22. He said, such measures are not education friendly. Read:Budget fails to reflect people’s aspirations: BNP He mentioned that spreading of education through private entrepreneurship will be hindered due to imposing of such tax. Mohiuddin Khan also proposed that the government forms a bank commission and a tax commission for bringing reforms in these two sectors.  

Research and Advocacy Organization PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA) have demanded the government to impose specific taxes on cigarettes and other tobacco products in the upcoming budget for 2021-22. In a press conference held virtually on Tuesday, the two organizations unveiled their proposals regarding tobacco taxes and prices in the 2021-22 FY national budget. Implementation of proposals would prevent premature deaths of nearly 390,000 current adults and 400,000 current youth, according to release. Also read: Dhaka Conference: Amend tobacco laws, impose specific taxes In addition, supplementary duty, health development surcharge and VAT on cigarettes would also earn the government Tk 34 billion in additional revenues, the organizations claim. The Project Head of Tobacco Control at PROGGA Md Hasan Shahriar presented the budget proposals are-- Introducing a tiered specific excise (supplementary duty -SD) with uniform tax burden (SD share of 65% of final retail price) across all cigarette brands. In the low-tier, the retail price should be set at 50 for 10 sticks, followed by Tk 32.50 as specific supplementary duty (SD); In the medium-tier set the retail price at Tk 70 for 10 sticks and Tk 45.50 should be imposed as SD;  In the high-tier, the retail price should be set at 110for 10 sticks, followed by Tk 71.50 as SD; and in the premium tier, set the retail price at Tk 140 for 10 sticks and BDT 91 should be imposed as SD. Read Amend existing law to build tobacco-free Bangladesh Reducing price tiers from four to two in the medium-term (2021-22 to 2025-26) by reducing the gaps in final prices and tax rates between cigarettes brands For 25 non-filtered bidi sticks, the retail price should be Tk 25, followed by a specific supplementary duty of Tk 11.25. The price for 20 filtered sticks should be Tk 20, which will be followed by a specific supplementary duty of Tk 9. As a result of such measures, in both filtered and non-filtered bidis, the specific supplementary duty will be 45 percent of final retail prices. For SLT products, the price per 10-gram jarda and gul should be Tk 45 and 25 respectively. A specific supplementary duty of Tk 27 should be imposed on per 10-gram jarda. For gul, the specific supplementary duty should be Tk 15. As a result of such measures, in both jarda and gul, the specific supplementary duty will be 60 percent of final retail prices. Read Bring smokeless tobacco products under tax net: PROGGA They also propose to retain the existing 15% Value Added Tax (VAT) and 1% Heath Development Surcharge on all tobacco products. According to the Global Adult Tobacco Survey (GATS), 2017, between 2009 and 2017, there has been a 1.5 million increase in the number of cigarette users. The numbers reveal that the existing tobacco tax structure has not been contributing to make Bangladesh a tobacco-free country by 2040, as envisioned by the Honorable Prime Minister. With the ongoing second wave of Covid-19 pandemic, the health sector and overall economy of the country are going through precarious condition. If tobacco use goes unchecked during such a period of vulnerabilities, it would put the additional risk for public health, Shahriar added. Also read:1.26 lakh people die in Bangladesh every year in diseases ... According to World Health Organization (WHO), smokers are more likely to become severely ill when infected with covid-19. This makes the existing tobacco users, around 40 million in number, extremely vulnerable to severe covid-19 infection. In Bangladesh, tobacco use claims 126,000 lives prematurely each year. In a 2019 study titled “Economic Cost of Tobacco Use in Bangladesh: A Health Cost Approach”, it was revealed that in 2017-18, the economic cost (medical expenses and loss of productivity) of tobacco use stood at Tk30,560 crore while revenues from the tobacco sector in 2017-18 FY was only Tk 22,810 crore. He also said raising the prices of tobacco products would discourage the youth from starting use and getting addicted while encouraging the existing users belonging to the poor demographic to quit. Read 10 people fined Tk 2,000 for smoking in public place Supporting fully the budget proposals to increase tobacco taxes and prices, the convener of the National Anti-Tobacco Platform Dr Qazi Kholiquzzaman Ahmad said the government must look for the welfare of the people, as dictated in our Constitution. “Unfortunately, the government only prioritizes the revenue aspect, turning a blind eye to how it impacts the lives of the people.” he also said. Former Vice-Chancellor of Dhaka University Professor Dr AAMS Arefin Siddique said, “To hike tobacco taxes and prices, we can always follow the precedents set by neighbouring Sri Lanka. We can progress through learning from each other. We also need to educate the youth on the detrimental effects of tobacco.” Read Tobacco causes 20% of deaths from coronary heart disease. Senior Research Fellow of the Bangladesh Institute of Development Studies (BIDS) Dr Naznin Ahmed said taxes at a specific rate should be imposed on tobacco. It will benefit the government “The covid-19 pandemic has created an opportunity for broader tobacco control. To utilize this, we need to make the harmful effects of tobacco widely known.” She also said. The Research Director of Bangladesh Institute of International and Strategic Studies (BIISS) Dr Mahfuz Kabir said the tobacco taxation structure requires fundamental reform. With that end in mind, specific supplementary duty needs to be introduced. Read Tobacco ban: Industries Ministry quashes health division's proposal “The implementation of taxation and price related budget proposals, particularly in the low-tier cigarette brands, would significantly increase revenues and lower the health risk of poor demographic, considering the fact that 72 percent of cigarette smokers are users of low-tier brands.” Md Mostafizur Rahman, Lead Policy Advisor for Campaign for Tobacco-Free Kids (CTFK), Bangladesh said. “We hope, the National Board of Revenue (NBR) will adopt the proposals. It will increase the government earnings, reduce existing tobacco use and also discourage the young from initiating,” Mostafizur added. Read Are Smokers More Vulnerable to COVID19?