Zera calls for low taxes on energy products

THE ZIMBABWE Energy Regulatory Authority (Zera) says it is lobbying government to lower taxes on energy products as a way of boosting the sector.

Zera senior engineer Samuel Zaranyika said local manufacturers of electrical products had lodged complaints with the regulator highlighting that it was becoming more profitable to import finished electrical goods as punitive duty was making local manufacturing too costly.

“We are lobbying government to reduce or remove duty for  importing components which are used to manufacture energy-efficient household appliances which include light emit diode (Led) bulbs as we want to do away with lights and electrical appliances that use a lot of electricity,” he said.

“We also want to double the global rate of improvement in energy efficiency and facilitate access to clean energy research, renewable energy and advanced cleaner fossil-fuel technology as well as promoting investment in energy infrastructure and clean energy technology,”

A removal of duty on energy inputs is anticipated to make locally-produced electrical products competitive on the local market.
This comes as Kango Private Limited (Kango) — the sole maker of gas stoves in the country — recently mounted a campaign lobbying government to increase duty on gas stove imports.

According to a Competition and Tariff Commission report, Kango believes the duty increases on the product will contribute to import substitution giving the country room to save foreign currency for some other commitments.

“The commission received an application from Kango products for an upward review of customs duty on complete gas stoves from 0-40 percent under the Sadc and Comesa trading arrangement. Kango alleges that tariff protection would safeguard and create more employment, conserve foreign currency through import substitution and generate more foreign currency.

“The company is facing stiff competition from imported gas stoves as research shows that major imports source countries are China, Egypt and South Africa,” read part of the report.
Local retail outlets have, however, expressed concern on the high likelihood of monopoly on pricing if duty increase on imported energy products is awarded.

Evidence provided by distributors reveals that Kango and some local energy product suppliers have been failing to fulfil some orders from retailers and are of the opinion that duty increase should be delayed until such time when the local manufacturer is able to adequately supply the market with energy products.

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