The Kenyan June Budget contained a proposal to remove VAT exemption on solar accessories, including solar water heaters. This will impact basic solar equipment such as solar powered lights significantly. The step will spell an introduction of 16 per cent VAT on these items, leading to increased costs.
The government has supported the solar industry by exempting inputs and raw materials for the manufacture of items such as solar panels, deep cycle-sealed batteries, which store solar power. However, without access to appliances such as bulbs, radios, TVs, and refrigerators, solar power in itself is not useful to the communities.
This is how other countries in East Africa act: Rwanda, Uganda and Tanzania exempt from VAT appliances such as solar-powered TVs, radios, irons, refrigerators, solar light bulbs, phone chargers and water heaters.
Source: Business Daily