Malawi Energy Regulatory Authority explains levies on generators

Malawi Energy Regulatory Authority (Mera) has come out in defence of levies charged on the generators that industries are buying and using to counter the existing electricity challenges.

In his presentation during commemoration of 2017 the World Standards Day, Malawi Telecommunications Limited (MTL) head of innovation Kondwani Masiye said while gensets are subjected to Malawi Revenue Authority (MRA) duties, Mera also charges levies on the gensets.

Factories such as this one use heavy duty generators during power outages

“This increases the cost of providing the services and in the end, it is the consumer who bears the cost,” he said.

Despite paying duty to MRA for generators, Business News has learnt that there is a minimum fee of K3 000 for generators more than 20  kilo-volt-ampere (KVA) and K100 per excess KVA and this is paid annually as long as the generator is operational.

Currently, Electricity Supply Corporation of Malawi (Escom) is struggling to provide electricity and has since said consumers should expect prolonged load-shedding for the next six months due to low water levels in Lake Malawi and its sole outlet, Shire River, where 95 percent of the country’s hydro-electric power is produced.

Mera senior consumer and public relations manager Fitina Khonje told Business News that as a regulator, it is entitled to collect the generator levies so as to be able to conduct inspection, installation as well as environmental safety.

“Our mission is ensuring that safety and environmental issues are adhered to. The funds generated from the generators levies are added to the funds used for that mission. In the course of energy regulation, there are resources involved and costs incurred.

We thus need to inspect and ensure that installation is done safely; that it does not feed back into the electricity grid as well as checking that the fumes are controlled so that people can access such areas without fear,” said Khonje, adding that most of the generators being used do not require registration as they are below 20KVA.

In a written response to a questionnaire on Thursday, Ministry of Finance, Economic Planning and Development spokesperson Davis Sado said government policy is to support clean energy that’s why there’s no duty on most imported solar equipment, what is paid is just value added tax (VAT).

“Going forward, government always evaluates its policies including tax policies ,depending on situations,” he said. n

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