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Sierra Leone: Impact of Goods and Services Tax and Import Duty Exemptions on Stand-Alone Solar Products – Report

 

This report presents results of the socioeconomic modelling that assessed the impact of the current tax regime on Stand-Alone Solar (SAS) products in Sierra Leone. This study builds on a recently developed ACE TAF responsible taxation tool and multi-country study piloted in Malawi, Rwanda and Sierra Leone.1 This study covers country- specific estimates of the impact of the exemptions, tracing back to the five years before the exemptions and the five years after the exemptions.

The analysis provides an evidence base for how Goods and Services Tax (GST) and import duty exemptions have, and will continue to, support the reach of SAS products. Specifically, this report explores the extent to which the exemptions have been effectively applied to solar photovoltaic (PV) systems ranging from a solar lantern to solar home systems that include other components and appliances. While the exemptions directly impact government
revenue in terms of foregone taxes, they also accelerate access to SAS products, deliver jobs in the value chain, improve livelihoods to households and small businesses, and a range of other benefits.

The recommendations are:

  • Maintain GST and import duty exemptions for SAS products for at least the next five years
  • Tie exemptions to a clear, identifiable, and well understood quality verification process
  • Improve coordination and build capacity among private and public sector entities to ensure effective and efficient implementation of exemptions
  • Build consumer awareness of high-quality SAS products to establish confidence and trust to enable the market to scale
  • Over time, improve the mix of financing options available for companies and consumers to ensure SAS products are affordable for all households.
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