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The government is seeking to introduce a new levy for manufacturers and importers which is aimed at protecting the environment.

As proposed in the Finance Bill 2024, the Eco Levy targets goods that are deemed to negatively affect the environment.

"There shall be a paid levy to be known as the Eco Levy on the goods specified in the Fourth Schedule manufactured in Kenya or imported into Kenya," read the Finance Bill in part.

Here is the detailed breakdown of the tax, the goods targeted, and how it will be paid

A photo of a phone user inserting a pin on their mobile phone during the registration of Hustler Fund on November 30, 2022.

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Ministry of Cooperatives

Goods Targeted

As highlighted in the Finance Bill 2024, which stipulates the tax measures that will finance the 2024/2025 Budget, the levy will be imposed on goods that contribute to noise, soil and air pollution.

One notable product that will be affected is mobile phones, especially smartphones. Another commonly used item set to be affected by the levy is diapers.

Microphones, loudspeakers, earphones, monitors, projectors, ATMS, calculating machines, with cash registers among them.

Rubber tyers used in vehicles, motorcycles, and bicycles will also be levied.

Also included are batteries or dry cells and plastic packing bags.

Levy Charges & Payments

The levy will be imposed at rates ranging from Ksh98 to Ksh1,800 per unit.

For instance, smartphones were listed under products set to have the levy charged at Ksh225 per unit. Levy for rubber tyers was proposed at Ksh1,000 per unit.

Levy for diapers will be charged at Ksh150 per kilogramme. On the other hand, plastic bags will be charged at Ksh150 per kg.

"The eco levy shall be paid to the Commissioner at the rate specified in the Fourth Schedule in the case of imported goods, by the importer at the time of entering into the country" proposed the Bill in part.

Impact

Given that manufacturers and imported will be paying more for their products, the prices of the goods will shoot up as business owners push down the additional costs to the consumers.

Notably, the Eco Levy is not a new tax in the continent. For instance, Ghana imposes the Eco levy on imported electronic devices and rubber tyres.

In the West African Country, the levy is charged between Ksh788 and Ksh3,155.

Other countries with environment-friendly taxes include Seychelles, Switzerland and Liechtenstein.

Presidents William Ruto and Nana Akufo-Addo during a Ghana state banquet, April 3, 2024

PCS

The National Treasury is set to introduce a raft of new taxes as President William Ruto's administration seeks to raise additional revenue to finance its projects and operations heading into the next financial year.

From motor vehicle tax to digital content tax, the government will widen the tax bracket culminating in more pain for taxpayers.

The measures, published in the Finance Bill 2024, will be tabled in Parliament for the legislators to discuss the amendments which are likely to face opposition from Azimio lawmakers.

Kenyans.co.ke takes a look at five taxes and how they will affect the taxpayer:

Treasury CS Njuguna Ndung'u speaking at the Investors conference during the 2023 Annual WB/IMF meetings, in Morocco on October 16, 2023

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National Treasury

Motor Vehicle Tax

Motorists were targeted in the new wave of tax reforms after the Treasury proposed the motor vehicle tax. This is the amount a motorist pays at the time of acquiring insurance cover.

Car owners could be taxed as low as Ksh5,000 for the service and a maximum of Ksh100,000 depending on the car's value.

The tax rate was set at 2.5 per cent of the vehicle's value which will be determined by the engine capacity, model and year of manufacture.

Ambulances, vehicles driven by government officials and diplomatic personnel will be exempted from these charges.

Minimum Top-up Tax

This tax bracket is reserved for multinational firms with a gross (consolidated) turnover of Ksh106 billion.

The amount will be calculated at 15 per cent of net income minus the actual tax rate, multiplied by excess profit.

Several public entities will, however, be exempted from paying the taxes.

Economic Presence Tax

This will be a tax payable by a non-resident whose income is derived from a business carried out on a digital marketplace.

According to the bill, a digital marketplace means an online platform that enables a person to sell or provide goods, property or services including ride-hailing services, food delivery services, freelance services, professional services, rental services and task-based services among others.

Those supposed to pay the tax shall be required to pay 20 per cent of the gross turnover. The business owners shall submit the returns before the twentieth day of the month.

Withholding Tax

The bill seeks to introduce withholding tax on goods supplied to public entities at a three per cent rate for residents and five per cent for non-residents.

Withholding tax is income tax paid to the government by the payer of the income rather than by the recipient of the income. It is deducted at source.

The tax provision will also include those making online payments.

Digital content Tax

This will involve digital content creators submitting a percentage of their earnings in tax. Treasury is seeking a 20 per cent tax for those operating digital platforms or monetising digital content for non-residents and five per cent for residents.

The bracket for online services was expanded to include ride-hailing services, food delivery services, freelance services, professional services, rental services and task-based services. 

KRA offices in Nairobi.

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Kenya Insights

On Saturday, May 11, the government published the National Finance Bill 2024 which proposed various tax measures to be implemented in the upcoming financial year.

The Finance Bill also lists various transactions where Kenyans are required to produce their Kenya Revenue Authority (KRA) PIN.

Among them is the registration of an employee who works remotely outside Kenya for an employer in the country.

Here are the 16 transactions where a PIN is needed as categorised below;

Times Towers in Nairobi which houses Kenya Revenue Authority’s head office. The photo was taken on Thursday, February 20, 2020.

Kenyans.co.ke

Business

As listed in the Finance Bill, one needs to have a KRA PIN during the registration of a business name and a company.

Trade licensing, importation of goods, customs clearing and forwarding are also some of the transactions that will require an individual to have a PIN.

Business individuals who make supplies to government ministries and agencies are also required to have a KRA pin. On the other hand, business owners who seek to register a mobile cellular Pay Bill and Till Numbers need the KRA PIN. 

Carrying out business over the internet or on an electronic network including through a digital marketplace is also listed among the 16.

Household

For starters, should an individual seek to open an account with financial institutions such as banks, the KRA PIN will also be needed.

Other transactions when the PIN will be required include during the registration of titles and stamping authorities and during the payment of deposits for Kenya Power electricity connections.

On the other hand, the PINs need to be provided when one is seeking approval of development plans and during the payment of water deposits.

Additionally, Kenyans who have purchased cars and are seeking to register the vehicles have to provide their KRA PINs. The PINS are also required during the transfer of motor vehicles, and licensing of motor vehicles.

Professional

For professionals who belong to various professional bodies, the PIN needs to be provided during registration or renewal of membership.

An undated image of vehicles at a yard for sale.

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KPA

Here is the list

• Registration of titles and stamping of instruments.
• Approval of development plans and payment of water deposits.
• Registration of motor vehicles, transfer of motor vehicles, and licensing of motor vehicles.
• Registration of business names.
• Registration of companies.
• Underwriting of insurance policies.
• Trade licensing.
• Importation of goods and customs clearing and forwarding.
• Payment of deposits for power connections.
• All contracts for the supply of goods and services to Government Ministries and public bodies.
• Opening accounts with financial institutions and investment banks.
• Registration and renewal of membership by professional bodies and other licensing agencies.
• Registration of mobile cellular pay bills and till numbers by telecommunication operators.
• Carrying out business over the internet or an electronic network including through a digital marketplace.
• Registration of a trust.
• Registration of an employee working remotely outside Kenya for an employer in Kenya.

Taglines

• Kenya signed its first Double Taxation Agreement with Zambia in 1968. 
• 14 Countries Have Signed DTAs with Kenya and are in Force.
• 15 Countries Are Still Considering the DTA. 

Since taking office, President William Ruto's administration has been in the process of overhauling the tax regime by eliminating double taxation for Kenyans in the Diaspora.

The tax principle involves paying taxes twice on the same source of income. This means that one is taxed in two different countries; their country of residence and home country and can occur at the corporate level and/or at an individual level.

In April, President Ruto ordered the Ministry of Treasury to overhaul the country's taxing space to enable a better working environment for those working abroad.

"All you need to do is to file your return and state what you have paid and we will give you a tax credit for what you have paid so that you do not pay taxes twice," President Ruto stated during a meeting with Kenyans residing in Ghana on April 2, 2024.

As such, the National Treasury has been spearheading the process, seeking to eliminate double taxation with neighbouring and global countries.

Recently, the Treasury announced the process of engaging with the Republic of Belarus to strike a Double Taxation Agreement (DTA) to forge stronger ties between the two countries.

DTAs are international agreements to allocate taxing rights between the said parties to avoid double taxation at the international level.

Kenyans.co.ke gives a breakdown of double taxation and nations that Kenya has either concluded or is in the process of eliminating double taxation.

Nations Whose DTAs are In Force With Kenya

Canada, Denmark, France, Germany, Iran, Korea, Norway, Qatar, Seychelles, South Africa, Sweden, United Arab Emirates (UAE), United Kingdom and Zambia.

What This Means

This means that Kenyans working in these nations can conduct business without worrying about being taxed twice.

Nations Who Have Concluded Agreements But Not Signed

Botswana, Nigeria, Portugal, Saudi Arabia, Singapore, Thailand, Turkey

What This Means

Kenyans living in these nations still face double taxation until Kenya and the host country formally sign the agreement.

Signed (Not in Force)

China, East African Community, Italy, Kuwait, Mauritius, Netherlands

What This Means

Kenyans living in these areas still face double taxation as the host nation has yet to enforce the agreement.

Under Consideration

Algeria, Cameroon, Democratic Republic of Congo (DRC), Ethiopia, Ghana, Ivory Coast, Jordan, Macedonia, Malawi, MozambiqueRussia, Senegal, South Sudan, Sudan, Zimbabwe.

What This Means

Kenya and these countries are currently engaging in talks regarding the DTA though nothing has been formalised. 

Advantages of Eliminating Double Taxation for Businesses

This presents an opportunity for businesses to reinvest more of their profits leading to expansion, innovation, and job creation.

Eliminating double taxation reduces the tax burden on business owners thus lowering their expenses.

Countries that enforce DTA become attractive destinations for foreign investors, leading to foreign direct investment and thus stimulating economic growth.

Double taxation presents a complex system for businesses operating in multiple jurisdictions hence removing the principle simplifies tax compliance.

DTAs also create a favourable environment for businesses to be internationally competitive. 

President William Ruto (second left) with Trade CS Rebecca Miano (left) and other regional leaders in Bujumbura.

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The Brief

The US Department of State, Bureau of Consular Affairs, will open its portal on Saturday, May 4, allowing applicants of the Diversity Visa program to check if they are selected or not.

In a statement, the Bureau notified its applicants that the portal will be available until September 30, 2024.

Take note that there is only one way of checking successful applicants. According to the US Department, selection does not guarantee a visa or an interview.

"Please be sure to have the Entrant's Confirmation Number, Last/Family Name, and Year of Birth to check the Entrant's status online," the Department stated.

A screengrab of a representation of steps to follow to check the US Visa Lottery status.

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Kenyans.co.ke

The Green Card lottery registration is conducted yearly between October and November. It is a program that makes immigrant visas available to citizens of countries with low immigration rates.

To qualify for the application, two conditions ought to be met; a citizen of a country with low immigration rates to the US and a graduate of a high school or its equivalent.

A circular released by the US Department of State revealed that up to 55,000 Green Card visas will be available for this year's selection.

How to Check for Green Card Results

To check the status of your Green Card application, click the following link: dvprogram.state.gov/ESC/

You will be directed to the Bureau's page, press the continue button.

A new page indicating 'Enter Entrant Information' will appear. Provide the following details; Confirmation Number, last or family name, year of birth and type the characters as they appear in the picture for authentication purposes.

Those who don't remember their Confirmation Number can click "Forgot Confirmation Number" where you will be directed to a page to fill in your programme year and personal details to assist the department in retrieving the number.

Once you've filled in the information required, click submit.

A poster showing the announcement of the 2025 Diversity Visa Lottery application results.

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US Embassy

Treasury Cabinet Secretary Njuguna Ndung'u announced that the National Treasury was finalising the 2024/2025 Budget Statement.

Consequently, in a notice, the CS called on Kenyans to give their views on the budget including taxation measures set to be implemented in the upcoming financial year.

As part of the process to involve Kenyans, the CS highlighted six areas he needs the input of Kenyans on.

For starters, the CS called on Kenyans to give views on how Kenyans can expand the tax base, ways to bring down the cost of living, create jobs and improve the foreign exchange balance.

The National Treasury building in Nairobi County.

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National Treasury

Kenyans were also encouraged to give their thoughts on how the government can accelerate economic recovery.

"Your proposals should be centred on suggestions on how to strengthen the implementation of Government priority programmes under the Bottom-Up Economic Transformation Agenda (BETA) geared towards economic turnaround and inclusive growth.

"Also, focus on specific ways to accelerate recovery and growth of the private sector and MSMEs," read the statement in part.

Additionally, the Treasury noted that it would be looking forward to receiving suggestions on integrating the youth and women into accelerating sustainable economic recovery and ways to manage public resources.

How to Participate

Treasury noted that Kenyans will be undertaking the process through email.

"In this respect, please share specific or general tips for the FY 2024/25 Budget Statement to the email budgetstatement@treasury.go.ke with a copy to budgetstatement@gmail.com," read the notice in part

Views and suggestions need to be submitted to the Treasury by the end of May 13, 2024.

According to Ndung'u, the upcoming budget will be read on Thursday, June 13.

Members of parliament in the national assembly on Wednesday July 5, 2023.

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Parliament of Kenya

Taglines

• Road fatalities have increased in the past seven years, raising concern over the government's ability to mitigate the situation
• NTSA developed an Action Plan to enforce traffic law compliance within the next five years
• The government seeks to reduce the number of road fatalities across the country by 50 per cent in 2030

The National Transport and Safety Authority (NTSA) has developed a raft of reforms to reduce the rising cases of road crashes experienced across the country.

From new speed limits and vehicle importation standards to driving licence compliance and boda boda safety regulations, the reforms will form the action plan for the Authority in the next five years.

As detailed in the National Road Safety Action Plan 2024-2028, the government aims to curb impunity and tame traffic offences.

Kenyans.co.ke takes a look at the strategic measures in line with the data.

Road Fatalities Over the Years

"Every year the numbers are going up. They have to come down and the template is known and practised elsewhere. Impunity is keeping us from doing the right thing. One year from now, we will have another meeting and (Transport CS) Kipchumba Murkomen you better report to us that the numbers are down otherwise you will be in a lot of trouble," President William Ruto stated during the launch of the Action Plan on April 17, 2024.

His remarks stemmed from the surge in crashes that have been experienced in nearly a decade as seen in the graphics below.  

The number of Road Fatalities From 2005 to 2022

Here are the laid-out strategies:

Safety Road Design

NTSA will develop safety design manuals to lower the number of fatalities across the roads. In this new design, the manuals will assume that user error will occur and hence focus on protecting motorists.

This will involve roadside barriers to be placed on high-speed roads to tackle off-road crashes. Additionally, the Authority will identify hazardous and accident-prone locations and propose solutions.

Speed-Limit

Four new speed limit reforms are set to be introduced over five years.

• 30 Kilometres per hour for areas with a potential for collisions between motorists and pedestrians and cyclists including villages, school zones or commercial locations.
• 30 Kilometres per hour for areas where children mix with traffic.
• 50 Kilometres per hour for areas where there is potential for side impact collisions such as intersections.
• 70 Kilometres per hour for areas where there is potential for head-on-collisions. This also includes undivided rural highways.

New Standards for Vehicle Importation

By 2030, vehicles entering the Kenyan market will be required to meet at least seven of the eight vehicle safety standards that were adopted by the United Nations:

These standards touch on both interior and exterior features that a vehicle must have before receiving approval by the Kenya Bureau of Standards (KEBS).

They include frontal impact protection, side impact protection, electronic stability control, pedestrian front protection, seat belts, seat-belt anchorages, motorcycle anti-lock braking systems and child restraints (devices installed in car seats).

In terms of seat belts, all vehicles will be required to have a system that alerts drivers and motorists when their seat belts are not fastened. Frontal and side impact protection provides guidelines on how the vehicle should protect its occupants in the event of a collision.

Vehicle Inspection

All commercial and public service vehicles will be inspected on an annual basis to assess the roadworthiness and safety features of the vehicles.

The major issues primarily involve brakes, tyres, steering wheel, lights and seatbelts.

Boda Boda Licensing Reforms

Part of the boda boda reforms include five new strategies to enforce compliance. 

• Introduction of a graduated licensing system to set higher safety standards for those seeking to acquire a licence.
• Introduction of an anti-locking braking system and acceptable safety standards for helmets and hazard warning signs.
• Motorcycle helmets to undergo regular laboratory testing to ensure quality safe standards in line with the standards.
• Tougher enforcement of set traffic laws to effect adherence.
• All boda boda will be required to join a SACCO, comprising at least 100 members.

Phasing Out Driving Licences

The government plans to phase out the old driving licenses within a three-year phase, during which all drivers will need to have the Smart DLs.

This is critical to administer an instant fine system and demerit point system to identify repeat offenders and enforce compliance.

Telematics

Designed to build capacity in enforcing adherence and deter repeat offenders.

It will involve the combination of telecommunications and informatics to provide real-time data on vehicle movements and driver behaviour. 

It will be useful in data collection and analysis, identification of high-risk drivers, evidence for prosecution as well as issuance of automated alerts and notifications.

The Kenya Red Cross on Sunday, April 28, responded to Kenyans seeking to join the organisation noting that there were vacancies for all interested. 

This comes at a time when most parts of the country are experiencing floods necessitating immediate response. 

Kenya Red Cross has been partnering with key government agencies to rescue close to 20,000 households which have been displaced by the heavy downpour. 

“Visit the nearest Kenya Red Cross branch and sign up,” Kenya Red Cross told Kenyans seeking to join the rescue team. 

Kenya Red Cross team rescuing Sultan Hamud residents swept away by floods on April 26, 2024.

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Kenya Red Cross

It should be noted that the rescue team is a volunteer position and does not come with monthly remuneration. 

“One of the most important traits of a volunteer at the Kenya Red Cross is being selfless and having no desire to gain anything from their actions,” Kenya Red stated. 

Kenyans who sign up for the program are expected to support the organisation's humanitarian work by contributing towards improving the lives of those in need. 

Requirements to join Kenya Red Cross Rescue Team as a Volunteer

Kenya Red Cross does not discriminate on nationality when applying for the position and as such, it is open for everyone. 

The volunteers have a responsibility to behave in accordance with the Kenya Red Cross Society code of conduct.

“Must conduct themselves with integrity and honesty and display a committed and positive attitude while performing their assigned tasks,” Kenya Red Cross states on the requirements. 

Volunteers will be also required to participate in any necessary training provided by the society.

Lastly, volunteers will also be required to respect the rights, beliefs and opinions of beneficiaries. 

A minibus submerges at JKIA on April 27, 2024.

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The National Transport and Safety Authority (NTSA) on Saturday, April 27 explained why its officers removed number plates from vehicles.

In response to queries by Kenyans, NTSA noted that the number plates are usually removed from vehicles which are deemed to be mechanically unsound.

Further, the Authority explained that there were various checks done on vehicles to determine if they were safe to be on the road.

According to NTSA, the check is usually done by experts who then give the green light for the number plates to be removed.

NTSA removing a number plate from a vehicle as a police officer monitors in Mombasa County on April 8, 2024.

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NTSA

"How do you ascertain that a vehicle is not mechanically sound without having ridden in it?" Janabi Sativa questioned NTSA.

"We only remove the plates if the vehicle is not mechanically sound. We have mechanical engineers who are mandated to undertake the inspection to ascertain that," NTSA responded.

Additionally, the removal of number plates from a vehicle prevents motorists from using the vehicles until the issues are fixed.

According to the Traffic Act Cap 403, no vehicle can operate on the roads without having a number plate.

"No motor vehicle or trailer registered under this Act or driven under the authority of a general dealer’s licence shall be used on a road unless there is fixed thereto in the prescribed manner the prescribed number of identification plates of the prescribed design and colour on which is inscribed the identification mark of the vehicle or of the general dealer’s licence," reads the Act in part.

According to the law, a motorist who drives a vehicle without number plates faces four demerit points. The points are usually used in the suspension of a Driver's Licence (DL). 

Notably, NTSA has been undertaking a crackdown on various roads in the country alongside traffic police. During the recent exercise, officers have been photographed removing number plates from some vehicles.

The recent enforcement was informed by the rising cases of accidents in the country.

Traffic police officers and a team from NTSA during a road check along the Nairobi-Mombasa Highway on Wednesday, March 27, 2024

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NTSA

The National Environment Management Authority (NEMA) has mandated the use of 100 per cent biodegradable bin bags for organic waste collection starting July 8, 2024.

This directive aims to combat plastic pollution in the country by replacing plastic bags with more eco-friendly alternatives. However, our analysis reveals that this transition may come at a significant cost for Kenyan households upwards of Ksh3,000 on the bio-degradable bags.

The directive encompasses various types of waste, including kitchen scraps, garden waste, and household waste. To comply, households will need to switch to biodegradable bin liners, as recommended by NEMA.

NEMA offices in Nairobi, Kenya.

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Wkimedia Commons

Following the government's ban on plastic shopping bags in 2017, retailers swiftly adapted by implementing charges for carrier bags, creating a new revenue stream for supermarkets and food sellers. This move marked a significant shift in consumer behaviour and highlighted the potential profitability of environmentally friendly alternatives.

Similarly, apartments in Nairobi and other towns began charging tenants a monthly fee for garbage collection services starting from as low as Ksh100 per month.

However, with the transition to biodegradable bags, landlords are expected to raise the garbage collection fee to offset the higher cost of these eco-friendly alternatives. This adjustment could further strain the finances of already burdened families, especially those with limited disposable income.

NEMA's directive requires waste to be collected separately and transported to designated material recovery facilities for further processing, underscoring the importance of proper waste management practices in mitigating environmental damage.

Prices

The price of the soon-to-be outlawed plastic bags varied depending on factors such as size, quality, and place of purchase.

Our analysis of online retailers revealed a wide price range, with plastic bags retailing anywhere from Ksh700 to Ksh1,500 for 50 pieces.

Some supermarket stalls offered plastic bags for prices ranging from Ksh400 to Ksh2,000.

However, the shift to biodegradable bags is expected to come at a higher cost. Our analysis of available biodegradable bags in the market suggests that Kenyans may need to spend upwards of Ksh3,000 to purchase a supply of these eco-friendly alternatives.

In our search for more affordable options, we found that Kenyans could purchase 15 biodegradable bags for Ksh629.

For those in need of larger quantities, such as 100 pieces of the 4-litre bags for kitchen countertop bins, the cost could be as high as Ksh6,239.

Importing biodegradable bags may offer slightly lower prices, but additional shipping and delivery costs need to be factored in.

For example, compostable trash bags suitable for 4-8 litre small trash could cost around Ksh1,700 for 150 bags, while a heavier-duty import of 30 bags could cost approximately Ksh3,000, excluding shipping and delivery fees.

Despite the high prices attributed to limited supply and high demand, it is anticipated that prices will stabilize as the market adjusts to meet the growing demand for biodegradable bags.

History of plastic bag bans

The history of plastic bag bans in Kenya is marked by a series of attempts to address the pervasive issue of plastic pollution. However, these efforts have often faced significant challenges and met with limited success.

In 2007, an attempt was made to clean up the country by banning the manufacture and import of bags up to 0.03 millimetres (30 microns) in thickness. Unfortunately, this initiative failed to achieve its intended impact, as plastic bags continued to be widely used and distributed.

Four years later, in 2011, NEMA declared a ban on plastic bags below 0.6 millimetres in thickness. Despite this regulatory action, little progress was made in reducing the proliferation of plastic bags, highlighting the limitations of enforcement and compliance.

The failure of these early bans can be attributed in part to opposition from industry lobbyists, who argued that implementing such measures would result in significant job losses.

Additionally, the sheer scale of plastic bag usage in urban centres like Nairobi, where millions of bags were issued daily by supermarkets and grocery shops, posed a formidable challenge to enforcement efforts.

In 2014, the Nairobi City County proposed the Plastic Carry Bags Control Bill, which aimed to ban polyethene bags, non-biodegradable plastic bags, and containers made from virgin plastic above a certain thickness and size. Despite the pressing need to address plastic pollution, the bill never materialised into law, underscoring the complexities of policymaking and stakeholder engagement in addressing environmental issues.

The culmination of these past efforts came in 2017 when the Cabinet Secretary of Environment and Natural Resources issued gazette notice number 2356, banning the use, manufacture, and importation of all plastic bags used for commercial and household packaging.

This comprehensive ban represented a significant step forward in Kenya's efforts to combat plastic pollution, reflecting a growing recognition of the urgent need for decisive action.

Plastic garbage bags in Kenya

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