The conventional first-principles density-functional theory (DFT) predicts a negative bandgap of the thermoelectric semiconductor Bi2O2Te, which needs to be corrected. To enable a higher-level precise calculation, in this report, we include the self-consistent on-site [Formula: see text] and inter-site [Formula: see text] interactions in our studies, the so-called [Formula: see text] method, and demonstrate that it significantly improves the description of excited states of Bi2O2Te. The on-site interactions of Te-p and O-p play an essential role and substantially improve the band gap of Bi2O2Te. Inter-site interaction between Bi-s, Bi-p, and O-p within the [Bi2O2] layer and between the intercalated Te layer and the [Bi2O2] layer further increases the band gap. Thermoelectric coefficient calculations show a significant Seebeck coefficient and the power factor in p-type doping, which originates from the intercalated Te layer.