This archive report was first published on 1 October 2019.
Kenya's energy rebate programme, introduced in the 2019 Finance Act, aims to make the country a more competitive investment destination by reducing power bills for manufacturers.
The programme allows industries to deduct up to 30% of their electricity expenses from their taxable income, a move that could reduce the government's income tax from the industries.
However, to qualify for the rebate, manufacturers must meet tough conditions, including a 10% increase in investments and sales every year.
According to Energy Cabinet Secretary Charles Keter, the benefits accrued will vary from one manufacturer to another, with those whose plants are operating at 100% getting to deduct the maximum 30%.
“A manufacturer with an actual overall performance (AOP) of 100% qualifies for a maximum rebate of an extra 30% of the electricity cost incurred for purposes of computation of taxable income,” said Keter.
“In the first year of claim, 20% of the cost of electricity from the grid will be allowed and the remaining 10% by weighted key performance indicators (KPI).”
“For subsequent years, the rebate claimed will be determined by the weighed key performance indicator,” added Keter.
