Sharing the East African Regional Handbook on Solar Taxation, a comprehensive guide outlining taxation for solar products in Uganda, Kenya, Tanzania, Rwanda, South Sudan, and Burundi. Developed in 2022, this handbook serves as a valuable resource, although updates may be required for ongoing relevance.
Notably, the taxation rates for solar refrigerators and freezers, as highlighted on page 36, reveal a significant disparity. These products encounter no tax exemptions, incurring Import duty at 25%, VAT at 18%, and WHT at 6% (UG) and 5% (RW), with exemptions in TZ and KE, in addition to Infrastructure levy at 1.5% (UG). Consequently, the total tax for solar refrigerators escalates to 50.5%, significantly higher than the mere 6% for solar water heaters in Uganda
The disparity in tax rates raises pertinent questions about the equitable taxation of energy solutions. While solar water heaters enjoy favorable tax treatment, essential for upscale establishments (hotels/residents in urban areas), the exorbitant tax burden on solar refrigerators, crucial for rural livelihoods, seems disproportionate (inconsistent). These off-grid refrigeration solutions hold immense potential in transforming the economic landscape for low-income entrepreneurs in rural settings.
The prevailing high tax rates on vital energy solutions like solar refrigerators pose a challenge to promoting productive use of energy in rural off-grid areas. Addressing this issue is paramount to fostering sustainable development and empowering communities to harness the benefits of clean energy for improved livelihoods.
