Renewable energy players want VAT-free solar products
The Renewable Energy Industries Association of Malawi (Reiama) has lobbied government to consider removing value added tax (VAT) on solar energy products to make them cheaper.
In a written response this week, Reiama president Sosten Chigalu said removing 16.5 percent VAT on solar energy products would lessen the tax burden on the rural people who desire to use solar lamps.
He said Reiama welcomes the gesture by government to remove 25 percent import duties on two solar electric lamps and lighting fittings.
Chigalu said: “These lamps are life essentials and must not be taxed at all. Just like government had removed import duties and VAT on solar panels, solar batteries, solar chargers and inverters in 2019, Reiama has repeatedly asked and engaged government to remove all taxes on lamps, TVs, radios, fridges and water heaters powered by solar energy.
“Product pricing is dynamic because there are many factors that go into pricing such as financing charges, cost of products, logistics, marketing, competition and others. We expect prices to drop in the range of 20 to 30 percent for the selected products.”
He bemoaned lack of regulation in the sector which he said has led to the proliferation of substandard products on the market and over reliance on imported products.
In the 2022/23 National Budget, government removed import duty and excise tax on solar lamps and solar fridges.
This was done to support the use of alternative sources of energy, and in continuing to help rural masses that are off the national grid.
Chigalu proposed the need for capacity building in universities and colleges with teaching equipment to equip and train instructors in renewable energy technology skills to promote innovation, research and development in the sector.
Earlier, Civil Society Network on Climate Change bemoaned lack of government’s commitment in the promotion of clean energy access as a means of fostering economic development in the country.
In a statement, the network said it was concerned that energy supply deficiencies are common, which results in interruptions to processes that require energy as an input.
