The government yesterday sprang to the defence of its renewable energy taxation policies by revealing that $2.21m worth of solar systems had entered The Bahamas duty-free since July.
The Ministry of Finance, confirming that complete systems, otherwise known as “solar kits”, can be imported tax-free once it approves the application, said some 50 requests had been given the go-ahead since the exemption was introduced in the 2018-2019 budget.
“Since coming into effect in July 2018, the Ministry has so far approved 50 applications for duty free importation of $2.2m worth of solar installation items,” the ministry’s statement said. “While solar kits are duty free, individual and universal parts, such as electrical wire or circuit breakers, which are used inside and outside of the renewal energy sector, attract the ordinary duty rates when imported separately.”
Marlon Johnson, the Ministry’s acting financial secretary, added: “Although businesses do have to apply for the exemption we have made the application process as simple as an e-mail. The only accompanying documents are copies of the invoices and a valid business licence.
“So far we have had a smooth process for moving these applications through. While we cannot grant exemptions on individual parts – many of which can be used for non-solar related provisions - we have been approving exemptions on all solar kits in keeping with the policy put in place by the government.”
The ministry’s statement appears to have been issued in response to yesterday’s Tribune Business article, in which solar energy providers urged the government to clarify “random and inconsistent” tax policies that were threatening “to kill an infant industry before it gets a foothold”.
Philip Holdom, president of Alternative Power Supply (APS), told Tribune Business it was “giving with the right hand and taking away with the left hand” despite the “solar kits” exemption by taxing individual system components - a policy confirmed by Mr Johnson.
Arguing that it was impossible for solar providers and installers to conduct business in such an arbitrary tax environment, he further revealed that replacement parts imported under a warranty were being subjected to a 45 percent duty rate plus ten percent stamp tax and 12 percent VAT.
Branding this “excessive taxation” and “a detriment to the ease of doing business”, the Alternative Power Supply president warned that the government was threatening to undermine its own policy drive - much touted by the prime minister - of encouraging Bahamians to pursue renewable energy solutions to both lower their power bills and benefit the environment.
The Ministry of Finance, though, yesterday said duty rates on solar system parts have been reduced. Panels are duty-free for some time, with solar batteries taxed at ten percent. In the past, it added that duty on these parts has been as high as 60 percent.