Disincentive to solar energy

Energy    Apr 28, 2021 6:13 PM

Senator Jose David Name spoke about the most controversial points of the Tax Reform, and the changes in the sales tax (VAT).

He said that concerns about modification of taxed products and the elimination of the exempt category has many sectors in the country in suspense, including unconventional renewable energies, according to La Republica.

Article 36 of the bill ‘Sustainable Solidarity’ establishes a 5% tax on energy inverters for a solar energy system with panels, solar panels, and the charge controller for a solar energy system with panels.

“This is a real contradiction on the part of a government that claims to bet on the energy transition as its main public policy,” Name said.

The senator said that removing these goods and services from the excluded group would be a great setback compared to the progress made in the goal of promoting renewable energies.

“The goal to achieve a 10% of energy generation from solar fields, are sabotaged by the government itself by including this tax in the reform,” Name said.

Name said that this proposal poses a great risk to the upcoming long-term renewable energy auction.

“I invite the government to seek new coherent formulas to get out of this crisis, with proposals that do not put at risk what has been gained so far,” Name said.

Bottom-Line: The reform has generated a lot of controversy in the country, as raising taxes during the pandemic is not a good strategy to reactivate the economy.

Name has a point, this proposal is creating great legal instability, and could reduce interest among investors for the next auction.

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