Manufacturers’ electricity bills might substantially reduce following the implementation of the energy rebate programme. The programme was introduced in 2018’s Finance Act that allowed industries deductions up to 30% of the electricity expenses from the taxable income.
This will result in decreased income for the government. Nonetheless, it will provide a boost to manufacturers as it will enable them to produce more at an affordable cost. Additionally, it will reduce consumer prices for most locally manufactured goods.
Even with the incentives, manufacturers are required to increase their investment by 10% every year as well as sales, to continue enjoying the rebate.
The Ministry of Energy has gazetted the programme thus allowing cheaper power for manufacturers who have previously complained of high electricity charges. Sky-high energy costs have held back local manufacturers from growing their businesses.
According to the Energy Cabinet Secretary Charles Keter, the benefit of the programme will vary from one manufacturer to another. A manufacturer whose plants operate at 100% capacity will get to deduct the maximum 30% rebate.
He further stated that in the first year of claim, 20% of the cost of electricity from the grid will be allowed and the remaining 10% will be weighted by key performance indicators. As for the subsequent years, the rebate claims will be determined by the weighted key performance indicators.
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