Proponents say it is a strategic tool designed to promote environmental stewardship across Kenya; critics say it might have unintended consequences on jobs in the long run
A proposed environmental tax tucked away in Kenya’s Finance Bill 2024, which will ultimately inform the National Budget for the fiscal year 2024/2025, has elicited sharp reactions.
To foster eco-friendly practices and promote its green agenda, the Kenyan government has proposed a stringent Eco Levy, which unlike previous macro/corporate interventions, aims to curb micro-pollution and waste management at the office and household level.
Besides targeting the usage and disposal of everyday office and household items, the tax also seeks to address e-waste pollution. It, for instance, recommends that those who intend to import plastics into the Kenyan market pay an extra fee of Ksh150 per kilo.
The proposed law would apply to diapers, batteries/dry cells, smartphones, earphones, clocks, radios, TV sets, and cameras. The proposed tax would also affect the prices of staplers, printers, calculators, photocopying machines, keyboards, mice, projectors and LCD monitors.
“The Bill proposes to introduce an Eco Levy on plastic packaging materials at Ksh150/kilo, diapers at Ksh98/unit, office machines at Ksh98/unit, calculating machines at Ksh225/unit and automatic data processing machines at Ksh225/unit. Others include arts & accessories at Ksh98/unit, telephones (including smart phones) at Ksh225/unit, microphones & speakers at Ksh98/unit, monitors & projectors at Ksh1,275/unit,” reads the levy in part.
The stringent Eco Levy aims to enhance existing weaker and less effective waste and pollution control mechanisms, such as the Extended Producer Responsibility (EPR) regulations that Kenya embraced two years ago. The EPR is a comprehensive global framework designed to hold manufacturers accountable for the entire lifecycle of their plastic and electronic products.
The move has led to the establishment of several Producer Responsibility Organizations (PROs) that collect EPR fees — a measly Ksh10 on average per kilogram of plastic imported — from their members as per the country’s Sustainable Waste Management Act of 2022.
Under the EPR regulations, local manufacturers and importers are mandated to establish post-consumer collection schemes, join compliance schemes and design products that facilitate reuse, recycling, and recovery.
The PROs are further mandated to shoulder the responsibility for the financial, organisational, and physical management of post-consumer products and end-of-life waste. Besides raising awareness and supporting circular economy initiatives, EPR requires manufacturers or importers to provide essential information on quantities, recyclability, and market traceability.
A case for the proposed environmental tax
Environmentalists and related national agencies, such as the National Environment Management Authority (NEMA), have put up a case for the Eco Levy, saying current mechanisms aimed at pricing plastic pollution, like EPR, are too lenient.
Betterman Musasia, a sustainable public sanitation advocate and a pollution control evangelist, says the proposed levy of Ksh150 per kilo is a step in the right direction because it is significantly higher than the current fees collected by PROs, which range from 0.5 to 10 shillings per kilo.
“Merchants of plastics and their lobby groups argue the levy is too steep, with some suggesting it could increase commodity prices by up to 150 per cent. However, research indicates that this may not be entirely true. For example, 32 empty 500 ml plastic bottles weigh about a kilo, meaning the cost increase per bottle of beverage would be around 7 percent or Ksh5 if the 150 shilling tax per kilo is passed on to consumers,” said Musasia.
“The increase could be significantly lower for other plastic packaged products since the packaging per item is only a fraction of a kilo. So it is not true that a kilo of salt will rise by 150 Kenya Shillings as some producer representatives have claimed in public,” added Musasia.
The Ministry of Environment, through Principal Secretary Festus Ng’eno, justified the proposed environmental tax, asserting that “it will help reduce pollution and mitigate public health risks.”
Speaking to the National Assembly’s Finance and National Planning Committee during a public participation session, Ng’eno said Kenyans are exposed to harmful substances, and the resulting treatment costs have significantly strained limited public resources.
“The proposal to introduce an Eco Levy on problematic waste streams is not just another tax, but a strategic tool designed to encourage sustainable practices, fund waste management programs, and promote environmental stewardship across the country,” said Ng’eno.
Every Kenyan generates about half a kilogram of waste daily, translating into 22 metric tons of waste generated daily and 8 million tons annually. In contrast, only 70 per cent of that waste is collected and dumped, according to the Environmental Best Practices in Waste Management Report by the NEMA.
Will the Eco Levy truly incentivise responsible waste management, or it is simply another tax that will translate to higher prices for local consumers?
Manufacturers protest, terming the levy punitive
While acknowledging the importance of environmental responsibility, manufacturers, including Coca-Cola (a leading global plastics polluter?), have opposed the levy. They insist that beyond the immediate financial impact on already squeezed family budgets for plastics that are a mainstay in Kenyan homes, the levy might have unintended consequences on jobs in the long run.
The American/global giant beverage manufacturer, through its senior managers, led by the Communications and Sustainability Director John Mwendwa, protested the environmental tax.
“The Eco Levy constitutes double taxation since Coca-Cola company already pays fees to a Producer Responsibility Organization as required by the Sustainable Waste Management Act of 2022,” said Mwendwa.
In a statement, the Kenya Association of Manufacturers (KAM) voiced its objection, saying the country operates within the East Africa Community (EAC) Common Market, the Common Market for Eastern and Southern Africa (COMESA) and now the African Continental Free Trade Area (AfCFTA) and any fees, levies, and duties that the Government of Kenya imposes affect Kenyan products and companies, as domestic taxes.
Due to this, KAM is concerned that Kenyan companies and products, including those aimed at providing clean energy solutions, will become uncompetitive, and the local market will be flooded with products from other EAC and COMESA countries.
“Eco Levy will automatically lead to a price increase on all plastic packaging materials, batteries, and hygiene products. Notwithstanding that KAM is at the forefront of supporting environmental conservation, the Eco Levy will not only duplicate the existing Levy mandated under Extended Producer Responsibility Schemes, but it will also further, reverse Kenya’s initiatives to create a circular economy to manage its waste and become a regional recycling hub,” said KAM.
The general consensus among manufacturers is that the Eco Levy will affect the affordability of essential household items in a country keen on eradicating poverty and jeopardise countless jobs in the long run. The jury is still out on whether Kenya can embrace a greener path while safeguarding the sustainability of industries and employment.
The Ministry of Environment and Climate Change says the levy and mechanism around it are an amalgamation of lessons borrowed from Barbados, Germany, Estonia, Jamaica, Guyana, Greece, Ghana, and the Bahamas.
If passed by parliament and implemented in Kenya, a leading East and Central Africa anchor state, will the levy likely have a far-reaching ripple effect and become a regional or even continental policy influencer? Only time can tell.
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Source link : https://www.downtoearth.org.in/news/africa/kenya-s-new-eco-levy-sparks-debate-a-waste-management-silver-bullet-or-just-another-tax–96737
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Publish date : 2024-06-18 09:46:55
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