Gov’t scrap 382/- tax on CNG

DODOMA: The government has approved a proposal from Members of Parliament to remove the planned tax of 382/- per kilogram of Compressed Natural Gas (CNG), which was set to be implemented in the 2024/25 fiscal year.

The Chairman of the Parliamentary Standing Committee on Budget, Oran Njeza, announced this decision today, Thursday, while presenting the committee’s recommendation on the 2024 Finance Bill.

The proposed tax had sparked debate since the start of the 2024/25 Government Budget discussions.

Many MPs argued that it contradicted President Samia Suluhu Hassan’s initiative to promote clean energy and hindered efforts to increase the use of domestically available natural gas.

Also Read: Legislators fault proposed 2024/2025 CNG levy

He highlighted that while the committee supported the government’s plan to allocate additional revenue (windfall profit) to the Road Fund; it opposed 382/- tax per kilogram of CNG.

“The committee opted against this proposal, considering that the gas sector is still nascent and growing slowly. It has not yet been fully utilized in the country due to the high costs of installing gas systems and the shortage of refueling stations, therefore, the committee recommended the government to withdraw this proposal, and the government agreed”, he said.

Further the committee recommended the government to remove taxes on equipment used to install gas systems, aiming to reduce the installation costs, currently estimated to be between 2m/- to 3m/- per vehicle.