State defends eco levy as MPs mount fightback

Lawmakers question how ministry intends to manage levy, address manufacturer's woes.

In Summary

•Manufacturers oppose the levy, citing an imminent increase in production costs.

•MPs poke holes on the proposal, saying it would worsen the high cost of living.

Plastic bottles among others waste materials are seen swept downstream Nairobi River near Michuki Memorial Park in Nairobi on June 5, 2024.
FINANCE BILL: Plastic bottles among others waste materials are seen swept downstream Nairobi River near Michuki Memorial Park in Nairobi on June 5, 2024.

The Environment ministry on Tuesday defended the proposed eco levy, which is among the contentious issues in the Finance Bill, 2024, saying it would help address the problem of plastic pollution.

Principal Secretary Festus Ngeno, while appearing before the Finance Committee of the National Assembly, urged MPs to approve the proposed levy to save natural resources.

“The rich natural resources base which supports tourism, agriculture and countless livelihoods are under threat from the growing pollution problem due to poor waste management,” the PS said.

The proposed law would apply to diapers, rubber tyres (including wheelbarrows and wheelchairs), batteries or dry cells, pencil sharpeners, staplers, printers, calculators, photocopying machines, coin-counters and wrapping machines.

Prices of keyboards, mice, televisions, smartphones, microphones and stands, earphones, headphones, sound amplifier sets, sound recording, transmission equipment, cameras, radio sets, clocks, projectors and LCD monitors would also be affected by the proposed tax.

MPs, however, said the imposition of the tax would burden Kenyans further as it would impact the prices of a wide category of goods.

Ngeno said the eco levy, which targets largely electronic products, is to solve increasing public health risks, adding that it should be applied to all plastics.

“We urge the committee to expand the scope to include all plastics…We propose that all plastics be subjected to eco levy to provide funds to manage the existing waste,” he said. 

He said Kenyans are exposed to harmful substances “whose medication is taking a toll on the government’s meagre resources”.

“Owino Uhuru lead poisoning is a classical case for the need to impose this tax,” the PS said.

The National Environment Management Authority has said they target Sh54 billion from the levy.

The PS added that the proposed levy is among Kenya’s commitment to a UN assembly resolution on tackling waste and pollution, saying it “is not just another tax”.

“It is not just another tax ... It is a strategic tool to encourage sustainable practices, fund waste management programme and promote environmental stewardship.”

“It is also estimated that over 1,000 harmful substances including lead, cadmium and mercury are released into our environment by these products.”

The ministry says it has borrowed lessons from Barbados, Germany, Estonia, Jamaica, Guyana, Greece, Ghana and the Bahamas.

Kenya produces 25,000 tonnes of solid waste every day, hence there is the need to act decisively and address the issue of pollution.

“These waste streams pollute the environment and pose serious risks to the public. They clog waterways, poison soils, and endanger wildlife,” Ngeno said.

He said the revenue generated will be earmarked for an enhanced waste management system “through investment in efficient waste management infrastructure”.

But MPs poked holes in the bid by the ministry, saying the proposed levy is not well-thought out and has no administrative structures for its management.

Finance committee chairman Kuria Kimani asked the ministry how they intend to differentiate the goods from others that already have taxes imposed on them.

“You need to rethink this tax. Even if we pass it, it will be hard to administer. The levels of pollution are also different for every product,” the Molo MP asked.

The big question is how the ministry intends to apply the tax without affecting the cost of the goods packed in plastics.

“What do young mothers do now that you want to impose a levy on diapers? Are you asking them to go back to nappies?” Kigumo MP Joseph Munyoro said. 

Kitui Rural MP David Mboni said, “This money will be used for any other thing, not necessarily on environmental protection. How is this money going to be used to protect the environment?”

He said that the proposed law is not thought out.

“It should be like the housing levy, which is protected and goes to the ministry to come up with programmes of how it will be implemented," the lawmaker said. 

“Any tax increment is going to raise the cost of living. We are moving to an internet space … [the cost of ]computers and telephones will go up … how will people communicate?” 

MPs also raised concerns that the uptake of e-citizen would be affected when phones become more expensive.

“How are Kenyans going to have access to these devices? Batteries are doubling, tyres prices would go up by Sh1,000 and there is motor vehicle tax of 2.5 per cent.”

Turkana South MP Ariko Namoit said, “Eco levy affects a wide range of day to day items … it affects the hustlers of this nation.”

Mandera Woman MP Umulkheir Kassim said, “We need to have regulations enforced under the existing waste management law as this is going to the lowest level of the community. Why rush and propose such levies without public participation?”

Baringo North MP Joseph Makilap said, “Almost all of the manufacturers who have come before this committee opposed the eco levy as it affects many other products in the value chain. It will raise the cost of living which we are fighting to bring down.”

Ainamoi MP Benjamin Langat said, “What we need to balance is between environment as we known but also help manage the business environment so that we don’t kill the former.”

But NEMA, which is the agency to enforce the tax, said the proposed levy will not affect manufacturers as they are targeting the raw material for plastics, not the end-product.

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