Source: Down to Earth

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Context

• Kenya's Finance Bill 2024 includes a proposed Eco Levy to promote eco-friendly practices and enhance waste management at the household and office levels.
• The proposed tax targets a wide range of products, including plastics, electronics and office machines, sparking a debate between environmentalists and manufacturers about its potential impact.

Details

Key Points

• About the Eco Levy: The Eco Levy is proposed as a stringent environmental tax aimed at reducing micro-pollution and improving waste management in Kenya by imposing fees on a variety of household and office products.
• Why It Is Being Introduced: The levy is intended to address the inefficacy of existing mechanisms like the Extended Producer Responsibility (EPR) regulations and to fund waste management programs while promoting sustainable practices.
• Why There Is a Protest from Manufacturers: Manufacturers argue that the Eco Levy constitutes double taxation, will increase the prices of essential goods, impact family budgets, and potentially lead to job losses, making Kenyan products less competitive regionally.

Similar Types of Levies in India:

• Plastic Waste Management Rules, 2016: India has implemented rules that mandate producers, importers, and brand owners to manage the collection of plastic waste generated by their products.
• E-Waste (Management) Rules, 2016: These rules require manufacturers to manage e-waste through extended producer responsibility, including establishing collection centres and recycling mechanisms.
• Green Tax on Vehicles: India imposes a green tax on older vehicles to reduce pollution and encourage the use of more eco-friendly transport options.

Way Forward:

• Stakeholder Engagement: Conduct comprehensive consultations with all stakeholders, including manufacturers, environmentalists, and consumers, to ensure balanced and practical implementation of the Eco Levy.
• Phased Implementation: Introduce the levy in phases to allow businesses and consumers to adjust and mitigate any immediate economic impact, while gradually promoting sustainable practices.
• Strengthening Circular Economy: Invest in and support initiatives that enhance recycling, reuse, and recovery of materials, ensuring that the Eco Levy complements and strengthens the circular economy framework.

Sources:

Down to Earth

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