Tanzania to reverse VAT on renewable energy technologies

Dar es Salaam City

Dar es Salaam City

15 February 2015, Dar es Salaam – THE government has in principle agreed to reverse its decision to remove all Value Added Tax (VAT) exemptions on renewable energy technologies thanks to lobbying and advocacy by members of the Tanzania Renewable Energy Associations (TAREA).

Speaking at a workshop towards universal access in Tanzania stakeholder consultation, the TAREA Executive Secretary, Mr Matthew Matimbwi, said that when the government last year announced that renewable technologies like solar and wind would be taxed, it was a huge disincentive.

“Since November last year until the end of the parliament session that ended last weekend, we have been engaging the authorities and they have now agreed to reverse their decisions, this is a clear indication of the value renewable energy is currently being given,” he said.

Mr Matimbwi said in addition to the reversion, TAREA has been asked by the government to cooperate with inspectors from the Tanzania Revenue Authority, the Fair Competition Commission and Tanzania Bureau Standards at points of entry to ensure only what is exempted isn’t charged.

He said that he was committed to giving this cooperation such that the inspectors know which is which particularly with devices that already come with accessories such as dry cells.

During the opening of the workshop, the Minister for Energy and Minerals, Mr George Simbachawene said that the development and dissemination of renewable energies was a priority of the country and that technologies such as solar, wind, biomass, hydro and geothermal were being promoted in line with the present National Energy Policy 2003 that is under review.

Mr Simbachawene said that off grid systems offer a quicker and more effective solutions towards closing electricity supply gap and hence faster access expansion, particularly in rural areas.

“On the other hand, we must find ways and means of getting alternatives to firewood and charcoal for cooking. Electricity and gas (Liquefied Petroleum Gas, Compressed Natural Gas and biogas) could be practical solutions to this challenge.

Majority of Tanzanians continue to use charcoal and firewood for cooking while electricity connection level is 24 per cent,” he explained.

The Minister said that it was an undeniable fact that energy is a key factor in accelerating socio-economic evolution and energy is also a golden thread that connects economic growth, increased social equity and an environment that allows the world to thrive.

The World Wide Fund for Nature Conservation Manager, Dr Amani Ngusaru said that the workshop that attracted diverse energy stakeholders, is a clear demonstration of how they can participate in solving energy challenges.

Dr Ngusaru said that the objective of the Sustainable Energy for All stakeholder consultation workshop is to discuss best practices amongst energy private sector and civil society groups and deliberate on how stakeholders can meaningfully engage in achieving the Sustainable Energy for All goals in the country.
*Tanzania Daily News

About the Author