Tax incentives for renewable energy

Under the VAT Act 2013 and VAT (Amendment) Act 2014, Kenya offers an exemption from value added tax (VAT) and import duties for supplies imported or bought for the construction of a power-generating plant or for geothermal exploration, as well as certain plant and machinery. According to the Acts:

• Solar cells and modules that are not equipped with elements such as diodes, batteries or similar equipment are free from import duty and exempt from VAT.
• PV semi-conductor devices including PV cells and light-emitting diodes, together with wind-powered generating sets that have already been assembled, are subject to a 5% import duty and 16% VAT.
• Wind engines (wind mills) are free from import duty and exempt from VAT.
• Hydraulic turbines and water wheels are free from import duty but pay 16% VAT.

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