VAT on biogas gadgets holds back tech deployment

A section of Tanzania`s alternative energy experts believe that the charging of Value added Tax (VAT) on imported biogas gadgets hinders its deployment in rural areas where it is badly needed.

Though quite desirable, majority of rural dwellers are finding it difficult to adopt the green technology because even before the imposition of the 20 per cent VAT rate, basic investment is somewhat on the high side.

The use of biogas technology would be the only way rural communities will have access to sustainable sources of energy,if capital investiment would be reduced by removing VAT in equipments used for compact biogas installation.

Most of the rural dwellers are not connected with the national electricity grid due to poor facilities and lack of capital and if they are connected it`s very expensive.

The view that VAT on biogas equipment was not desirable is particularly championed by the Appropriate Rural Technology Institute (ARTI) executive director Nachiket Potnis, in the belief that its abolition would enable rural communities get access to the alternative, modern and cheap sources of power.

ARTI also argues that widespread use of biogas would enable the country save a lot of foreign exchange, now being expended on the importation of Liquefied Petroleum Gas (LPG).

The success of this measure would also strengthen and stabiles the value of the home currency.

In addition, ARTI also believes that the application of biogas technologies would help the low income earners in both rural and urban areas to reduce poverty as raw materials for its generation was amply available.

Presently, ARTI has engaged the government in a dialogue that is looking for ways for which biogas could be generated to the extent of meeting both household and industrial needs.

However, the removal of VAT on equipment for generating and supplying biogas needs to be carefully handled as this could be exploited by some unscrupulous manufacturers to evade tax payment obligation.

ARTI for instance suggests that VAT for domestically produced equipment such as specialised plastic tanks used in compact biogas generation and connection could be exempted.

The raw-materials for use in the Compact Biogas System are abundantly supplied from waste flour, vegetable residues, waste food, fruit peelings and rotten fruit.

These are used for generating natural gas generation in storage tanks.

The success of ARTI Tanzania and other alternative energy stakeholders would be to provide appropriate energy solutions and enable Tanzanians join the global fraternity in the fight against global warming and climate change, rapid deforestation, decreasing of fossil fuels and general pollution.

ARTI Tanzania is a non profit organisation aiming to develop, promote, standardise, popularise and commercialization of innovative, appropriate and sustainable technologies that are able to improve the quality of life and standard of living of the Tanzanian community.

* SOURCE: Guardian