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| Plastic bottles among others waste materials are seen swept downstream Nairobi River |
The cost of imported products could rise if the National Assembly adopts a proposed law on Budgetary Support for Environmental Protection.
The government has given the public until September 27 to give views on the proposed law that seeks to impose a form of tax on imported products, similar to the eco levy which formed part of the rejected Finance Bill, 2024.
In a Kenya Gazette and a local daily notice, the Ministry of Environment, Climate Change and Forestry is seeking views on the proposed law in what experts view as a revival of tax proposals rejected in the Gen-Z protests.
“The additional budgetary allocation is to be derived from revenue generated from imported finished products as may be specified in legislation, and shall be paid directly to the National Environmental Restoration Fund,” the notice reads.
According to the notice, the additional revenue is a strategic tool designed to be applied to products that contribute significantly to the waste burden.
”It is meant to encourage environmentally sustainable practices, fund waste management programmes and promote environmental stewardship across the country.”
Although still in its infancy, the business community has condemned the proposal, terming the reintroduction of ‘eco levy’ as an insult to Kenyans’ intelligence.
The Kenya Association of Manufacturers (KAM) says the imposition of levies on imported raw materials and intermediate products ostensibly to promote exports has no economic benefit as the country is a net importer.
The yearly economic survey report by KNBS also shows despite a 17.4 per cent growth in export earnings for the year ending 2023 to Sh873.1 billion, the trade deficit still widened to Sh1.62 trillion.
This was up from Sh1.41 trillion in 2022, when the value of imports was at Sh2.15 trillion, which was a 30.9 per cent increase from Sh1.64 trillion in 2021.
A top official at the lobby told the Star that the association opposes the back door revival of the eco levy during public participation to shield members from the high cost of doing business likely to be brought about by the planned tax regime.
“This is purely a revamped eco levy. The government has just tweaked the words to hide the tax component. What is budgetary support if it is not being drawn from the exchequer? posed the official.
The lobby was at the forefront of opposing the eco levy in the rejected Finance Bill, 2024.
The levy targeted most basic commodities including diapers, batteries/dry cells, smartphones, earphones, clocks, radios, TV sets, and cameras.
It also targeted staplers, printers, and calculators, photocopying machines, keyboards, mice, projectors and LCD monitors.
It, for instance, recommends that those who intend to import plastics into the Kenyan market pay an extra fee of Sh150 per kilo.
“The Bill had proposed to introduce an Eco Levy on plastic packaging materials at Sh150/kilo, diapers at Sh98/unit, office machines at Sh98/unit, calculating machines atSh225/unit and automatic data processing machines at Sh225/unit.
“Others included arts and accessories at Sh98/unit, telephones (including smartphones) at Sh225/unit, microphones and speakers at Sh98/unit, and monitors and projectors at Sh1,275/unit.”
Jacob Murigi, a mobile phone accessories vendor in Westlands is asking the government to be mindful of its people, saying that more taxes will further cripple struggling businesses.
“Where is this government expecting to get taxes from if we close businesses? How do you overtax imports when local manufacturing is on its deathbed?”
Last month, Treasury CS John Mbadi hinted at the government’s plan to reintroduce progressive aspects of the Finance Bill, 2024 in a bid to raise part of Sh346 billion envisioned in the rejected law.
Mbadi said that the exchequer would propose a Tax Law Amendment Bill that would empower Parliament to introduce new taxes if necessary, outside the Finance Bill that amends individual laws that create various taxes.
Although he later dismissed the sentiment, stating that the government was plotting to lower taxes going forward, the proposed environment tax on imported products contradicts his statement.
by VICTOR AMADALA