Regulation & Policy May 29, 2019 4:29 PM
Authorities confirmed that the National Development Plan (PND) will open the door to a series of fiscal benefits for the renewable energy market.
According to a report from Kevin Bohorquez for La Republica, different PND articles were modified to reduce, and in some cases, eliminate the Value Added Tax (IVA) for energy generation projects.
An example of this is Article 179, which extends the term to use the special income deduction for energy-generation investment projects, from five to 15 years.
“Changes were also made to Law 1715. This law creates tax incentives for unconventional energy generation projects. The first change is an income incentive. It used to be valid for five years, and now we decided to extend it to 15,” said Diego Mesa, Vice Minister of Mines and Energy (MinMinas).
The expert added that the incentive has a tax deduction of 50% to 15 years. “It is not an exemption, it is an incentive tied to the investment,” he said.
The official explained that this benefit will only apply to investments in power generation initiatives. However, he said that there is another article that aims to eliminate the VAT for the adaptation process of solar panels.
With this, citizens or small and medium enterprises can use this type of energy source with the advantage of eliminating this tax.
“This will make the use of solar panels viable. To round the figure, for example, a panel that costs CoP$500,000, will cost CoP$400,000,” he explained.
Bottom-line: Again, the government has proven its commitment towards the renewable energy sector.
Political will plus an undeniable potential seem to be the perfect combination to assure the success of the energy market.
Now it is all about keeping up the good work and making sure to learn from previous lessons to guarantee success in the upcoming renewable energy tender.