Deliberating the Renewable Energy Tax Exemption Bill 2026 at the National Council today, MPs raised concerns about the implications of granting tax exemptions to the energy sector while other sectors continue to be taxed. The bill aims to provide tax incentives for renewable energy projects to attract investment, reduce development costs, and support the country’s clean energy ambitions till 2040.
During the deliberation, the Samdrup Jongkhar MP questioned whether a proper comparative analysis was carried out to assess the impact of such exemptions.
Tshewang Rinchen, Samdrup Jongkhar MP, NC said, “On one side, we are imposing tax such as the goods and services tax and other taxes. On the other hand, there is exemption coming in. This may be understood differently. How was a comparative analysis done to study the implications?”
In response, members of the Natural Resources and Environment Committee said consultations were held with the Ministry of Finance and the Druk Green Power Corporation, adding that implications would be minimal.
Kelzang Lhundup, a member of Natural Resources and Environment Committee, NC said, “The biggest challenge for renewable energy project development is the lack of investors. If this bill could attract Foreign Direct Investments, development costs would be reduced and ensure sustainable opportunities that we can gain.”
Ugyen Tshering, another member of Natural Resources and Environment Committee said, “17 projects are in the pipeline. With some, agreements were also signed such as TATA Power, Adani, Jindal and some from countries other than India. Works are ready to commence soon. If we are not able to provide the exemptions on time, projects would be delayed.”
Presenting the committee’s review findings, members said the tax exemption is expected to encourage investments and strengthen partnerships in the renewable energy sector.
Kelzang Lhundup added that, “Rather than thinking that income would be reduced, the strategic physical intervention, which is monetary intervention, would create double the loss incurred.”
The Bill is scheduled for adoption tomorrow.
If passed, it is expected to support country’s goal of generating 25,000 megawatts of renewable energy by 2040.
Kelzang Chhophyel
