Tanzania Abolishes Controversial CNG Levy The Tanzanian government has scrapped a contentious levy on compressed natural gas (CNG), providing relief to consumers and businesses. The announcement came as Parliament passed the 2024 Finance Bill, which included provisions to eliminate the Sh382 per kilogram charge. The levy, introduced in the 2023 budget, had drawn widespread criticism from the public and industry stakeholders. Many argued that it would stifle the growth of the CNG industry and make the fuel less affordable for consumers. In a statement, the Ministry of Energy said the decision to scrap the levy was taken to “promote the use of natural gas as a clean and affordable fuel source.” The ministry noted that CNG is playing an increasingly important role in meeting the country’s energy needs and reducing its carbon footprint. Industry experts welcomed the government’s move, saying it would boost the adoption of CNG and support economic growth. They argued that the previous levy had created uncertainty and slowed down investments in the sector. The elimination of the levy is expected to make CNG more competitive with other fuels. The cost of CNG for vehicles is now estimated to be approximately 40% less than gasoline and 20% less than diesel. This is expected to drive down transportation costs and make CNG a more attractive option for businesses and households. The decision to scrap the CNG levy also aligns with the government’s commitment to promoting green energy. CNG is a cleaner burning fuel than gasoline or diesel, producing lower levels of emissions that contribute to air pollution and climate change. The 2024 Finance Bill includes other measures aimed at supporting economic growth and reducing business costs. The bill reduces the corporate income tax rate from 30% to 25% and introduces tax exemptions for investments in renewable energy projects. The passage of the Finance Bill is a significant step in implementing the government’s economic agenda for 2024. The measures contained in the bill are expected to stimulate economic activity, create jobs, and make Tanzania a more attractive destination for investment.Tanzania Scraps Tax on Compressed Natural GasTanzania Scraps Tax on Compressed Natural Gas The government of Tanzania has withdrawn its proposal to impose a tax of Sh382 per kilogram on compressed natural gas (CNG). The decision was made in response to concerns raised by lawmakers and the public that the tax would hinder efforts to promote the use of affordable natural gas. Finance Minister Mwigulu Nchemba had initially proposed the tax in the 2024/25 budget, arguing that the revenue would be channeled into the Road Fund. However, this proposal was met with strong opposition from Members of Parliament and the general public. Parliamentary Budget Committee Chairman Oran Njeza explained that the committee supported the government’s goal of redirecting windfall profits to the Road Fund, but opposed the introduction of the CNG tax. The committee reasoned that the gas sector was still in its early stages of development and faced challenges such as high installation costs and a lack of filling stations. The decision to scrap the tax was welcomed by experts in the energy sector. Associate Professor of Development Economics at the University of Dar es Salaam, Dr. Abel Kinyondo, highlighted the importance of CNG in reducing air pollution and aligning with Tanzania’s commitment to the Paris Agreement on climate change. Financial expert Dr. Donath Olomi also applauded the government’s move, noting that CNG use was still limited in the country. He argued that taxing it would discourage people from adopting the cleaner and more affordable fuel. The scrapping of the CNG tax is seen as a positive step towards promoting the use of natural gas in Tanzania. It remains to be seen how the government will address the financial needs of the Road Fund while encouraging the transition to sustainable energy sources. Tanzania has scrapped a controversial Sh382 per kilogram charge on compressed natural gas (CNG) after Parliament passed the 2024 Finance Bill. The levy, which had been introduced in the 2023 Finance Act, drew widespread criticism from industry stakeholders and consumers, who argued that it would make CNG unaffordable and stifle the growth of the sector. According to the Tanzania Petroleum Development Corporation (TPDC), the removal of the charge will reduce the cost of CNG by around 30%, making it more accessible to businesses and households. Industry experts welcomed the decision, saying it would boost demand for CNG and support the government’s efforts to promote clean energy. CNG is considered a cleaner alternative to traditional fuels such as petrol and diesel, as it produces lower emissions and contributes to better air quality. The Tanzania Revenue Authority (TRA) has been directed to implement the changes immediately.