Uganda has joined the ranks of African nations embracing e-mobility incentives by introducing the Finance Act 2023. Effective January 1, the act reduces customs duties on electric vehicle charging equipment to 10% and slashes the value-added tax (VAT) to 7%.
The Uganda Ministry of Environment anticipates that these incentives will lead to the deployment of 50,000 electric cars by 2025, significantly reducing the importation and consumption of fossil fuels on the country’s roads.
Strategic Moves: TotalEnergies and Bako Motors in Uganda
Currently, TotalEnergies, the French oil marketer, is pioneering installing the first network of recharging electric vehicles in 19 service stations in Uganda. Simultaneously, German-Uganda start-up Bako Motors is gearing up to introduce locally-made tricycles and electric bicycles in 2023.
These strategic moves highlight global and local entities’ collaborative efforts to drive electric vehicle adoption and expand the charging infrastructure.
South Africa’s Green Transition
South Africa actively considers tax incentives and substantial investments in green energy and e-mobility industries. With a focus on safeguarding its auto exports, South Africa aims to align with the green energy shift in key markets like the UK and Europe. Both regions have set targets to transition to zero-emission vehicles, which could impact South Africa’s motor industry. President Cyril Ramaphosa emphasizes the need for incentives in the electric vehicle manufacturing industry to facilitate a swift transition from internal combustion engines.
Global Shift: UK and EU Leading the Way to Zero Emissions
The UK and the European Union are taking decisive steps toward a zero-emission future. The UK Government plans to introduce a zero-emission vehicle mandate from 2024, setting targets for manufacturers’ new car and van sales to be zero emissions rated.
Similarly, the European Commission is implementing regulations to lower carbon emissions from motor vehicles by 55% by 2030, aiming for zero emissions by 2035. These ambitious goals signal a transformative shift that may impact South Africa’s traditional motor industry.
Continental Momentum
Across Africa, several nations are spearheading efforts to boost electric vehicle adoption through strategic incentives. Uganda, Egypt, and Kenya have implemented tax breaks, discounts, and import duty reductions to encourage the transition to e-mobility.
These initiatives are accompanied by the growth of charging infrastructure and the phased-out use of fossil fuel-powered vehicles in government fleets. The continent is witnessing a rise in the number of electric vehicles on its roads, with projections indicating a substantial market value increase to US$21.39 billion by 2027.
Original Article: https://www.independent.co.ug/pushing-evs-why-african-govts-are-reducing-taxe-on-eco-friendly-cars/
