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
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.
