by ESTEBAN KILL
The government proposes to eliminate all taxes on machinery and equipment used for power generation, according to a bill to open the electricity market and encourage private sector participation.
“Machinery or electrical components which serve to project developers, would be tax exempt”, says Article 97 of the plan, presented on Wednesday before the Legislature.
The proposal is already well along and it is only necessary that the president submit a commission to Congress.
The initiative seeks to regulate the energy sector and stimulate the production of renewable energy from private sector input under the tutelage of the Ministry of Environment, Energy and Telecommunications (MINAET).
Tax incentives will be for projects in the country, regardless of whether the capital is public or private, domestic or foreign.
At present the initiative will promote energy production by private enterprise to meet the demand of the country, which in 2016 will be 4018 megawatts.
The exemption proposed in the bill goes beyond hydroelectric generation and even includes pioneering projects such as producing energy from hydrogen and all kinds of equipment related to the reduction of pollutants in power generation processes, be it hydro, wind, geothermal or hydrogen-based. The proposal also highlights the tax exemption for hybrid cars (which run on fossil fuel and electricity).
The main regulatory authority would rest with the Market Manager (AAM), which would be raised as a semi-autonomous institution with full juridical personality, responsible for market management.
Regulatory policy and calculation of rates will be held by the Regulating Authority of Public Services (Aresep).