TAREA Collaborates with TRA to Clarify Import Duties and VAT for Renewable Energy Technologies.

TaTEDO SESO as a member of the Tanzania Renewable Energy Association (TAREA)   On July 25, 2024, participated in the important dialogue session with the Tanzania Revenue Authority (TRA) regarding import duties and Value Added Tax (VAT) related to renewable energy technologies and services. The workshop resource persons were experts from the customs department. The department is responsible for tax collection on behalf of the government, trade revenue support across East Africa, and administration of all international trade taxes.

The primary objective was to enhance understanding of recent customs duties and VAT regulations concerning renewable energy technology solutions. Participants sought clarity on tax bases, upcoming tax laws, exemptions for solar and other renewable energy (RE) technologies, tax interpretations, import taxes on renewable energy products, and more.

Key Insights from the  Dialogue Session.

1. Import Duties and VAT Exemption:

• The discussion covered Import Duty, Excise Duty, and VAT on imports. Notably, solar and wind energy products enjoy tax exemptions. These specialized equipment include solar panels, modules, chargers, controllers, inverters, vacuum tubes, collectors, and deep-cycle batteries used for solar power storage.
• Some e-mobility and clean cooking products also benefit from full or partial exemptions. Electric bikes and three-wheelers qualify for tax exemptions if their chassis is manufactured locally. Clean cooking solutions (such as LPG and CNG) receive 25% to 30% exemptions.

1. Electric Vehicle (EV) Registration and Licensing:

• EVs during registration posed challenges due to their lack of capacity cylinders. In 2024, the Motor Vehicle Registration Act was amended. Now, EVs will be registered based on the kilowatt (kW) of the engine of an electric vehicle.
• Three-wheelers pay TZS 95,000 for registration, while large vehicles will pay TZS 250,000. Retrofitted vehicles will not be considered in this arrangement because they have been registered according to the cylinder capacity(CC).

1. Lithium Batteries versus Lead Acid Batteries:

• Lithium batteries are expensive, while lead acid batteries are cheaper. However, lead acid batteries pose environmental challenges during their disposal.
• To address this, the country imposes excise duty on lead acid batteries to compensate for environmental effects and externalities during their disposal.

 Key Takeaways and Recommendations

1. Removing Excise Duty from Lead Acid Batteries:

• Participants were recommended to strive to remove excise duty on lead acid batteries to encourage cleaner alternatives. This has been difficult because of the effects of TRA proposed

1. Collective Dialogue and Proposal Preparation:

• TAREA members committed to collaboratively preparing a proposal for tax exemptions on renewable energy products and accessories not currently exempted.

1. Capacity Building for TRA Staff:

• A capacity-building event should be organized to train TRA staff on renewable energy technologies.

1. Renewable Energy Product Showcase:

• TAREA plans to showcase renewable energy products to TRA staff to enhance their understanding and awareness of renewable energy products

1. Amendment of Tax Payment System:

• TAREA will submit information to amend the tax payment system for payees who are using the pay-as-you-go approach.

1. Custom Department Follow-Up:

• TAREA will engage with the customs department to understand the process for obtaining exemptions from the government.

In summary, this collaborative effort aims to promote sustainable energy adoption, clarify tax regulations, and foster a cleaner, greener future for Tanzania.

1. TaTEDO SESO Conducted Capacity Building for TANESCO Staff on E-cook.

TaTEDO Sustainable Energy Services Organization recently conducted a capacity-building program aimed at educating staff members of the Tanzania Electric Supply Company Limited (TANESCO) on the workings and benefits of Electric Pressure Cookers (EPCs). The training was part of an ongoing effort to promote the adoption of energy-efficient cooking technologies in Tanzania, aligning with the country’s broader goals of reducing energy consumption and improving household energy use.

The program, which gathered key TANESCO staff, focused on providing them with a thorough understanding of EPC technology, including its operational mechanics, energy efficiency benefits, and potential impact on the Tanzanian energy sector.

Understanding EPCs: A Game-Changer in Energy-Efficient Cooking.

Electric Pressure Cookers are modern kitchen appliances that cook food quickly by maintaining high pressure inside the cooking pot. Unlike traditional cooking methods that rely on prolonged heating, EPCs use a fraction of the energy, making them a highly efficient alternative. During the training, TANESCO staff were introduced to the technical aspects of EPCs, including their design, functionality, and the significant energy savings they offer compared to conventional cooking methods.

The sessions also covered the various benefits of EPCs, such as reduced cooking times, lower electricity consumption, and the potential for reducing household energy bills. The training emphasized how widespread adoption of EPCs could lead to a substantial decrease in electricity demand during peak hours, contributing to a more balanced and stable power supply system.

 Benefits for TANESCO and Tanzanian Households

The introduction of EPCs was seen as a strategic move to enhance energy efficiency at the household level. For TANESCO, promoting the use of EPCs could help in managing the country’s electricity load more effectively, particularly during periods of high demand. By encouraging the use of energy-efficient appliances, TANESCO could reduce strain on the grid, leading to fewer outages and a more reliable electricity supply.

For Tanzanian households, EPCs offer a host of benefits beyond energy savings. They provide a quicker, safer, and more convenient cooking experience, with the added advantage of being more environmentally friendly. As the country continues to urbanize and the demand for electricity rises, the shift towards such energy-efficient technologies becomes increasingly important.TANESCO by adopting clean electric cooking could divert the revenue that is harnessed in the charcoal sector(more than 1 billion USD) and this will also contribute to the economy of this country.

Empowering TANESCO Staff

TaTEDO SESO’s capacity-building initiative was part of its ongoing mission to support the adoption of sustainable energy solutions across Tanzania. By equipping TANESCO staff with the knowledge and skills to understand and promote EPCs, TaTEDO SESO aimed to foster a culture of energy efficiency within the organization and beyond.

The training was well-received by participants, who expressed their enthusiasm for the new insights gained. Many highlighted the relevance of EPCs in the context of TANESCO’s objectives to improve energy management and support the country’s sustainable development goals.

A Step Towards a Greener Future

The successful completion of this capacity-building program marked a significant step towards a greener and more energy-efficient future for Tanzania. By educating TANESCO staff on the benefits of Electric Pressure Cookers, TaTEDO SESO contributed to the broader national effort to reduce energy consumption and promote sustainable living practices.

Looking ahead, the knowledge and skills imparted during this training are expected to play a crucial role in TANESCO’s ongoing efforts to modernize the country’s energy sector. As more Tanzanian households adopt EPCs, the collective impact on energy savings and environmental sustainability could be profound.

TaTEDO SESO’s initiative underscored the importance of collaboration between energy service organizations and utility providers in driving the adoption of innovative, energy-saving technologies that benefit both consumers and the environment.

• Prev
• Next

Tweet