New Eco Levy threatens Kenya's green future and jobs, say experts

Business
By Brian Ngugi | May 19, 2024
Treasury CS Njuguna Ndungu. [Elvis Ogina, Standard]

Kenyans hoping to lighten their environmental footprint might face a heavier financial burden thanks to a proposed ="https://www.standardmedia.co.ke/testbed/sports/business/article/2001494944/queries-over-mckinsey-contract-in-kenyas-e-mobility-transition">Eco Levy< tucked away in the new Finance Bill Draft.

This levy, backed by the Ruto administration, aims to promote responsible waste management, yet it could end up squeezing household budgets and hindering access to essential technology, warn industry players.

The proposed bill targets a wide range of everyday items, raising concerns about affordability, experts said.

Imagine this: if you’re a Kenyan working from home, the cost of your office equipment, including printers and calculators, could jump by Sh98 or Sh225 depending on the type.

Staying connected? New phones, whether basic or smartphones, could be slapped with a Sh225 levy, making communication more expensive under the new bill.

Even diapers, a basic necessity for many families, are not exempt, potentially adding Sh98 to their monthly expenses.

Beyond the immediate financial impact, the levy might have unintended consequences, experts warn. For instance, Kenyans looking to upgrade to more energy-efficient electronics, like monitors and projectors, could be discouraged by the Sh1,275 levy.

Energy consumption

This could hinder efforts to reduce overall ="https://www.standardmedia.co.ke/business/business/article/2001495338/insurers-oppose-proposed-motor-circulation-tax-in-finance-bill-2024">energy consumption<.

The Green Dilemma: environmental responsibility is crucial, but so is affordability. The question remains: will this levy truly incentivise responsible waste management or simply translate to higher prices for consumers?

A key concern is how the revenue collected from this levy will be used.

Will it translate to improved recycling facilities, waste management infrastructure, or public education campaigns to encourage responsible disposal?

Experts are urging the government to instead target heavily polluting items or establish tiers based on energy efficiency, which might be a fairer approach.

Additionally, some say investing in public awareness campaigns about responsible waste disposal could go a long way in achieving long-term environmental goals.

The proposed Eco Levy raises valid concerns about affordability and effectiveness.

“Kenyans are willing to do their part for the environment, but it shouldn’t come at the cost of their well-being,” said Patrick Kariuki, a sustainability expert.

Battery weight

“Finding a balance between environmental responsibility and economic reality is key for a sustainable future for all Kenyans.”

The Associated Battery Manufacturers Group (ABMEG) is also sounding the alarm on the proposed tax hidden within the ="https://www.standardmedia.co.ke/testbed/sports/amp/business/article/2001495359/traders-warn-high-levies-will-be-a-burden-to-hustlers">2024 Finance Bill Draft<.

The bill includes a staggering Eco-tax of Sh750 per kilo on battery weight.

Imagine this: a standard car battery, weighing just 12kg, would see its price jump by a whopping Sh9,000 due to the tax, pushing the retail price to a backbreaking Sh17,500 – a 120 per cent increase.

This isn’t just sticker shock, according to players in the sector.

They are warning that the tax being fronted by the Ruto administration is a potential death knell for Kenya’s battery industry.

According to them, the harmful domino effect is clear: larger solar batteries, essential for clean energy solutions, would be burdened with a Sh45,000 tax, making them a luxury few Kenyans could afford.

The industry, a significant employer, faces immediate collapse, jeopardizing countless jobs and Kenya’s transition to a greener future if the new tax is adopted.

The umbrella lobby for battery makers maintains it is not against environmental responsibility. They support a well-designed Eco-tax, but only if the government demonstrates clear transparency.

Additionally, according to them, Kenyans deserve to know exactly how this tax will be used – and whether it will truly fund vital environmental improvements related to batteries.

“This proposed tax, in its current form, is a blunt instrument. It punishes consumers, cripples a vital industry, and undermines Kenya’s clean energy ambitions,” said the lobby’s group CEO Guy Jack.

ABMEG has urged the government to reconsider this approach and work with the industry to develop a sustainable solution that protects the environment and fosters responsible battery use.

“Kenya can embrace a greener path while safeguarding its industries and jobs. Let’s work together for a solution that benefits all Kenyans and our environment,” said Mr. Jack.

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