A consortium has proposed amendments to the value-added-tax (VAT) of 14 percent on items previously exempted by law.
The consortium has submitted a memorandum on Tax Laws (No.2) Bill, 2020 to the National Assembly Departmental Committee on Finance and National Planning that plans to have a committee sitting in the next few days.
The Finance Act 2020 has introduced a VAT to clean cooking, solar and wind products thus slowing down the government’s effort of ensuring 100 percent of the population having access to electricity by 2022 and clean cooking solutions by 2030.
According to the press statement, this imposition of VAT entrenches the marginalization of Kenyans living in lower-income and rural communities the majority of whom live off the national grid and access their energy needs through
“During the COVID19 pandemic, Kenyans without electricity are less able to access basic health, safety and education information via radio, television or telephone and do not have power to support local enterprise. Those without clean cookstoves are exposed to dangerous household air pollution, making them more vulnerable to the infection within their homes due to the significant impact of low air quality on respiratory illness. Clean electricity and cookstoves are essential at any time but are made even more so by the pandemic.” read the statement.
Speaking on the proposed clauses for the Bill, the chairperson of KEREA, Engineer Kamal Gupta stated that solar home systems and clean cooking products (stoves and biogas) are essential in converting rural populations from over reliance on toxic fuels such as paraffin and firewood .
“This is key for preservation of individual health and reduction in environmental degradation. The proposed clauses will fast track Kenya’s international commitments on reduction of carbon emissions and universal access to Energy.” he said.
Patrick Tonui, Head of Policy and Regional Strategy, GOGLA said that poor and vulnerable rural population are the most disadvantaged when it comes to access to electricity as they are off the main grid.
“This limits their participation in the realization of economic and social rights. The subsidization of alternative energy solutions is paramount in line with Article
27 of the Constitution. In order to realize equitable access, marginalized communities ought to be afforded affirmative action in the form of fiscal incentives. This will even the energy access field with those who are on-grid.” he added.
According to the statement, currently 8.1 million Kenyans are still living without electricity, while 92% of the rural population relies on wood fuel for cooking which is harmful to their health1.
Therefore, to meet these targets the Act must be amended to reinstate VAT exemptions for clean cooking and solar products.
During the COVID19 pandemic, Kenyans without electricity are less able to access basic health, safety and education information via radio, television or telephone and do not have power to support local enterprise.
Aaron Leopold, CEO of the Africa Minigrid Developers Association stated that
COVID 19 vaccines and all vaccines for that matter, must be stored at incredibly cold temperatures using reliable energy sources.
“In rural areas of Kenya however, this may not be possible due to a lack
of energy access. Minigrids provide this reliable, grid-quality power that could help Kenya recover more quickly from this pandemic, provide higher quality health services more generally, create tax paying jobs in the process by offering electricity than can power the rural communities who cannot be reached by KPLC. We should be taxing the problem, not the solution.” he said.
Those without clean cookstoves are exposed to dangerous household air
pollution, making them more vulnerable to the infection within their homes due to the significant impact of low air quality on respiratory illness. Clean electricity and cookstoves are essential at any time but are made even more so by the pandemic.
“It is with this in mind, that a consortium of renewable energy organisations in Kenya came together to seek a solution that would be both a win-win for the Kenyan government and the rural/ lower income population who will be heavily affected by the introduction of the VAT.
These organisations are led by Kenya Renewable Energy Association (KEREA) include; GOGLA, the Clean Cooking Association of Kenya (CCAK) and the Africa Minigrid Developers Association (AMDA).