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Published On: Mon, Nov 18th, 2019

ERA champions 5yrs moratorium for new renewable energy products

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By Ikechukwu Okaforadi

The Environmental Rights Action/Friends of the Earth Nigeria has called on the federal government to offer a five years moratorium for new renewable energy products to improve energy access for all.
Speaking at a media briefing on the need for tax reduction on renewable energy in Nigeria, the Executive Director of ERA/FoEN, Godwin Uyi Ojo, also called for the reduction of Value Added Tax (VAT) on renewable energy products from 7.5 percent to 2 per cent.
According to him, the government should consider the sustainability of renewable energy programme if it intends to have a sustainable environment for the future generation.
While he campaigned for five year tax holiday to be granted to pioneers status on indigenous renewable energy businesses in Nigeria, he called for “Start up grants from government for indigenous renewable energy businesses”.
He said across Africa, energy demands outstrip supply, adding that the situation is worse in Nigeria. According to him, globally, in spite of the rising energy demand, more than 1.6billion people have no access to electricity, while about 2.4billion depend solely on firewood.
“In Nigeria, about 70 percent of the 200 million people depend solely on fuelwood for energy for heating and cooking. This has led to the high rate of deforestation of 4.5 percent (about 500,000 hectares) representing one of the world’s highest deforestation rate annually”, Ojo said.
Speaking further, Ojo said the policy brief on tax regimes for renewable energy in Nigeria seeks the promotion of renewable energy access for all by the elimination of the prevailing high tariffs.
According to him, the diverse sources of tax is worrisome with 5% stamp duty, 5% on solar panels, 25% on batteries and inverters, and other sundry taxes which he said raises the tax burden to about 30% on products.
“We strongly propose that lowering taxes on renewable energy products will go a long way in the promotion of energy access for all. Therefore, the proposed hike on Value Added Tax (VAT) from 5% to 7.5% in Nigeria, if at all implemented should not be extended to solar lighting equipment and clean energy cookstoves.”, he pointed out.

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