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ERA/FEoN advocates 2% vat on renewable energy products

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An environmental group, Environmental Rights Action and Friends of the Earth ERA/FoE has called on the Federal Government to reduce Value Added Tax (VAT) on all renewable energy products to two per cent to fast-track a transition from dependence on fossil fuel to renewable sources of energy.

Executive Director of the group, Godwin Uyi Ojo said as Nigeria is making efforts to reduce overdependence on fossil fuel as a source of revenue and power, the imposition of heavy taxes on renewable energy products would be an obstacle to renewable energy promotion.

Speaking at a briefing on tax reduction on renewable energy at the weekend in Abuja, Ojo explained that as the country is gradually transiting to other sources of renewable energy, it would be beneficial to the nation to reduce tax and place a five-year moratorium and holiday tax on all renewable energy products to meet energy demands across Nigeria. 

“There are opportunities linked to reduced tax burdens and a strong commitment to energy transition from fossil fuels to renewable energy sources in line with the Paris Agreement of 2015,” he said.

Speaking on direct benefit of clean renewable energy sources to Nigerians, especially the grassroots, Chairman and Chief Executive Officer, Development Association for Renewable Energy, (DARE), Yahaya Ahmed said tax reduction would make renewable energy products cheaper and affordable.


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