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Sri Lanka solar, renewable power sector pays zero tax: minister

Apr 02, 2019 07:34 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - Sri Lanka's renewable power sector is not paying a single cent as taxes, while levies have gone up in many other sectors, ex-Deputy Minister for Power and Energy Ajith Perera said.

Most sectors have seen a hike in taxes, including personal income tax with the people called upon to help repay national debt.

Zero Taxes

"In many sectors taxes have gone up," Perera told parliament. "But in renewable, especially solar and wind, taxes are zero.

"I have to thank Minister Ravi Karunayake for this policy which he started when he was finance minister."

"This was one of the most important steps take to promote the renewable sector in Sri Lanka. As a result not a single tax is charged on solar panels or other related equipment."

He said the policy had helped connect close to 200MW of power to the grid.

About 250 new companies had started in the sector and 10,000 jobs have been created," Perera said. "We are proud of that."

"Five 10 MW plants for which licenses were issued also went ahead because of the tax free policy."

He said the private sector has invested in excess of 200 million dollars in renewable sector in Sri Lanka with no government money being used.

A 50 million dollar credit from Asian Development Bank is being used to give loans at 8 percent to rooftop solar. State-run National Savings Bank was also giving subsidized credit to customers of Lanka Electric Company.

Perera said several wind plants also went ahead due to tax free status.

Tax Scam?

The global green energy lobby is strong and firms in the sector are getting corporate welfare by escaping taxes and also getting subsidies from taxes charged on other sectors.

The green energy lobby in Europe in particular is also pushing for extra taxes on other forms of energy to punish the public and tilt the playing field further in their favour, violating principles good governance and taxation dating from the time of Kautilya and beyond.

Principles of good governance hold that taxes should be taken as painlessly as possible, like a bee takes nectar from a flower.

But carbon taxes are designed to cause pain and change behavior.

In France, motorists who already pay high taxes on fuel, suddenly caught on how unjust feel-the-paid carbon taxes were and started the yellow vest movement, in the first major push-back against the powerful green lobby.

In France taxes were already estimated to be around 64 percent on unleaded petrol and 59 percent for diesel.

The green lobby uses a an age old principle borrowed from religions that people are 'sinning' to punish them, and make them feel guilty, regardless of whether they are already paying heavy taxes, critics have pointed out.

The yellow vest anti-carbon tax protest had now tuned into a full blown revolt against President Emmanuel Macron.

The carbon taxes in Sri Lanka are on top of already high taxes on fuel including import duties and excise which is an important source of revenue for the government.

In Sri Lanka petrol is charged the highest excise tax, while diesel, which causes more pollution, is charged less.

Sri Lanka has also proposed a carbon tax on which the burden falls most heavily on older, poorer drivers who cannot afford new cards and pensioners. (Colombo/Apr02/2019)


 

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