Gov’t promoting growth in renewable energy sector Loop Jamaica

The content originally appeared on: Jamaica News Loop News

The Government is implementing measures to facilitate increased investments in Jamaica’s renewable energy sector.

Finance and the Public Service Minister, Dr Nigel Clarke, said the Income Tax Act will be amended to exclude Independent Power Providers (IPPs) producing energy from renewable sources from the definition of “regulated company” for the purpose of section 30 of the Act.

“These amendments will reduce the Corporate Income Tax rate for IPPs from 33 and a third per cent to 25 per cent. This reduction will be limited to IPPs, who produce 75 per cent or more of renewable energy from wind and solar and who are regulated by the Office of Utilities Regulation (OUR). They will not benefit from the Employment Tax Credit,” he explained.

Minister Clarke was opening the 2024/25 Budget Debate in the House of Representatives on Tuesday (March 12).

He said the energy sector is highly dependent on imported fossil fuels, primarily oil.

“However, their use has significant environmental drawbacks. The finite nature of fossil fuel reserves and the environmental concerns associated with their use have led to a growing emphasis on cleaner and more sustainable energy sources,” he noted.

“The objective of the reduction in the Corporate Income Tax is to promote the growth of the renewable energy sector, reduce greenhouse gas emissions, and ensure energy independence,” he added.

Reduction of the Corporate Income Tax rate payable for IPPs producing 75 per cent or more of their energy from renewable sources, will result in an estimated revenue impact/loss of $31 million.

The amendments shall be effective from the 2023 year of assessment.