NEWS

The Uganda Solar Energy Association (USEA) has launched a marquee handbook on solar taxation. This handbook is the result of a policy and taxation workshop in February 2019 organized by USEA. This work is part of the support provided by the United Nations Capital Development Fund CleanStart Programme, in partnership with the UK Government’s Department for International Development (DFID).

According to USEA CEO, Joyce Nkuyahaga, this handbook is "part of many USEA initiatives to guide members and other stakeholders to understand how to apply taxes related to the sector." This is the first of its kind handbook that will play a key role in facilitating a better understanding of solar taxation. It will also serve as a foundational product to support lobbying on behalf of the industry.

Understanding Solar Taxes

Exemptions provided within the East African Community Customs Management Act has enabled progress in expanding solar energy access.

Yet, inconsistent interpretation and application of policy and the lack of sector support has hampered the off-grid solar industry. The lack of clarity in import regulations, customs and tax policy has led to continual delays in importation for companies. It also has caused misunderstanding between solar energy players and tax and customs authorities.

USEA intends to bridge this communication gap by developing a handbook for solar taxation in Uganda. This handbook will be relevant for all stakeholders. This includes customs officials, importers, shipping and clearing agents.

The Solar Taxation Handbook is a comprehensive guide to solar products, parts and accessories. It serves as a reference document and training resource for individuals, firms, officials and organizations involved in the movement, release and clearance of off-grid solar products.

What does the Handbook cover?

The Solar Taxation Handbook will offer:

1. A concise overview of the tax laws and regulations about the solar sector
2. Regional updates for the East African Community
3. An overview of common exempted and non-exempted solar products
4. A listing of customers system coding and classification of solar products

The handbook also answers the following questions:

• Now that spare parts to the SHS are taxed, how do I price them to cover my costs (taxes) and make a profit?
• Why do LED bulbs suffer import duty at importation yet they are regarded as an integral part of the system generation and development?
• Why do deep cycle batteries (DCBs) suffer import duty yet they are listed in the 5th schedule of the EAC CMA 2004 as exempt goods from Import duty
• The Pay as You Go solar players normally have marketing agents who are not their employees and whose role are to only look for clients and get some commission on the same. Are these agents regarded as employees or independent consultants who only suffer WHT?

Download the handbook here.