Eco levy

Purpose and Implementation 

Objective

• The eco levy is intended to redress environmental damage and pollution caused by the import of certain finished products .

• It aligns with the "polluter pays principle," ensuring that manufacturers of products contributing to pollution finance their safe disposal .

    Scope:

• The levy is applied only to imported finished products to protect local manufacturers, who are already subject to the Extended Producer Responsibility (EPR) .

   Products Subject to Eco Levy:

• Various goods, including electronic devices and packaging materials, are subject to this levy. For instance, an eco levy rate is set for items like automatic data processing machines and parts of furniture made from different materials .

Committee Recommendations and Concerns

Amendments and Deletions:

• The Committee recommended deleting the proposal to impose an eco levy on certain items like diapers, tires of motorcycles, bicycles, wheelchairs, and three-wheeled motorized vehicles (tuk tuks) due to concerns about the economic impact on consumers and businesses .

• The eco levy on electronic devices was also criticized for potentially raising the cost of laptops and tablets, which could widen the digital gap and negatively affect the government's digital transformation agenda. 

Economic Impact:

• The levy is seen as potentially increasing the cost of goods for Kenyan consumers, as manufacturers and importers are likely to pass down the additional costs .

• There are concerns that the levy might deter foreign direct investment and harm the competitiveness of Kenyan exports .

Implementation Challenges:

• Stakeholders highlighted the lack of a specific allocation for the benefits of the eco levy in the Finance Act, as well as the absence of a clear framework for its implementation.