Kenya s photovoltaic module export tariffs

In Kenya, since 2013, there have been several revisions of the Value Added Tax (VAT) and Customs Management Acts vis-à-vis application of taxes and duties on solar PV modules, balance of system components and appliances designed for use on solar PV systems.

In September 2013, the newly introduced Value Added Tax Act, 2013 (The Kenyan VAT Act, 2013) did not contain any provisions for VAT exemption or zero-rating of solar equipment and accessories. This meant that from 1st September 2013, imported solar equipment and accessories were subject to VAT at 16%.

A representative sample of these solar PV companies importing solar PV products were interviewed and engaged for a period of 2 months to collate information on importation procedures and exemption application for commonly imported solar PV products and systems.

The importation guidelines developed for the selected range of imported solar products and systems aims to help companies understand the correct processes, classification, tax and duty expectations etc. to increase predictability and subsequently reduce costs and delays for solar companies.

Item 45 of the Part I of the First Schedule to the VAT Act 2013 provides VAT exemption on supply of “specialized solar equipment and accessories, including solar water heaters and deep cycle-sealed batteries which exclusively use or store solar power”.

Revenue Growth: Tariffs contribute to national revenue, reducing dependence on external loans. Strategic Trade Policies: Kenya can negotiate better terms in bilateral trade agreements, leveraging its tariff policies. Trade Retaliation: Other countries may impose reciprocal tariffs on Kenyan exports, limiting market access.