Unit to lobby for fairer taxes for solar equipment
The Presidential Delivery Unit (PDU) says easing tax restrictions and making solar equipment affordable would boost the electrification of rural farms and unlock the potential of the agriculture sector as a driver for economic growth.
PDU head Janet Banda said this in an interview on the sidelines of anAgri-Energy Delivery Lab PDU hosted at the Bingu International Convention Centre in Lilongwe last week.
She said solar equipment used in agricultural production in Malawi is expensive and is usually managed as well as repaired by untrained professionals, leading to frequent breakdowns, a development which has undermined its adoption as an alternative to on grid electricity systems.
Banda, who is also the Deputy Secretary to the President and Cabinet, said: “We will lobby with the Treasury in the next budget [2025/26] to look at the VAT [value added tax] that is attached to solar equipment so that farmers can buy reliable and appropriate equipment.
“We are going to submit a list of solar equipment that is suitable for our needs so that they can target that specific equipment for VAT exemptions.”
Currently, there is a waiver that allows local farmers to import solar equipment tax free, but they are charged taxes on spare parts.
The recommendation follows concerns by local farmers that most farms in rural and remote areas are not connected to the national grid, a development which undermines their capacity to mechanise and boost productivity on their farms.
Omade Alide, a local farmer affiliated to the Kasinthula Cane Growers Cooperative, said some sections of local farmers cannot afford to import spare parts under the current tax regime; hence, have to temporarily halt operations when the equipment breaks down.
He said: “Some of the farmers we represent are not connected to the national grid. This means that when the solar equipment stops working, all the work that required electricity stops. This is not good for our operations.”
Agriculture productivity is one of the main pillars of the Malawi 2063, the country’s main growth and development strategy to guide and operationalise its transition to an inclusively wealthy middle-income country by 2030.
