There is a need for government policies to reflect growing environmental concerns. The newly assented Finance Bill 2019 provides incentives for renewable energy and conservation-focused initiatives.
President Uhuru Kenyatta approved the reduction of excise duty on all electric-powered motor vehicles from 20 per cent to 10 per cent. The move is meant to promote the importation of electric cars.
On the other hand, there was an increase in the excise duty on motor vehicles with compression-ignition internal combustion piston engine (diesel or semi-diesel) of a cylinder capacity exceeding 1,500cc from 20 per cent to 35 per cent.
Furthermore, the new legislation will see lower corporation tax of 15% for investors operating plastic recycling factories for the first 5 years.
Besides, there is a VAT exemption on services offered to plastic recycling plants and supply of machinery and equipment used in the construction of the plants.
“As Kenya increases the demand for renewable energy there will be exemption of VAT on specialized solar equipment subject to approval by the Cabinet Secretary for Energy”, part of the bill read.
In a move seen to promote the uptake of green bonds subscription, there will be income tax exemption for interest income accruing from listed bonds, notes or other similar securities issued for infrastructure, projects and assets defined under the green bonds standards and guidelines and other social services with maturity periods of at least 3 years.
