How Kenya Could Lose Ksh23B Coca Cola Deal Signed During Ruto's Visit
The soft drinks giant opposed sections of the Finance Bill 2024 that include tax proposals on 10 percent Excise Duty on both locally manufactured and imported plastics as well as the Eco-Levy.
Marvin Chege 
American multinational soft drinks company Coca-Cola was on Thursday, June 6 among the multinational companies which joined entities opposed to the Finance Bill 2024, a move that puts its Ksh23 billion ($175 million) investment in Kenya in jeopardy.
The soft drinks giant opposed sections of the Finance Bill 2024 that include tax proposals on 10 percent Excise Duty on both locally manufactured and imported plastics as well as the Eco-Levy.
Coca-Cola's senior managers who appeared before the National Assembly Finance and Planning Committee warned that the new tax will create a volatile business climate, erode investor trust and hinder strategic planning.
Cliff Machoka, the Director of Public Affairs, Communications, and Sustainability at Coca-Cola East and Central Africa during a past interview with Spice FM. /FILE
“Frequent & un-anticipated tax policy shifts create a volatile business climate, erode investor trust & hinder strategic planning, such unpredictability exemplified by abrupt tax rate changes & or introduction of new taxes, directly impacts the core structures of business, this instability not only discourages investment but also implicates tax remittances,” said Cliff Machoka, the Director of Public Affairs, Communications, and Sustainability at Coca-Cola East and Central Africa.
He added, “This levy will include the cost of doing business.”
Coca-Cola's directors also termed the newly introduced Eco-Levy double taxation for essential Industry players and put the cost of various goods out of reach for members of the public.
“There is already a mechanism that is tested and works, eco levy is therefore a double charge on already what is happening. That would at one point make the industry products unaffordable,” said Coca-Cola Communications and Sustainability Director John Mwendwa.
The American giant beverage manufacturer and distributor urged the National Treasury to consider doing away with a proposal by the National Treasury to delete the word ‘imported’ in section 42(G) of the Excise Duty Act, which means the 10 percent will apply both to locally manufactured and imported plastics
The eco levy seeks to impose Ksh150 per kilogram on all articles of plastic packaging materials, a move that would likely witness an increase in terms of importation of such goods.
Kenya inked the multi-billion deal on Tuesday, May 21 during President William Ruto's visit to Coca-Cola's global headquarters in Atlanta, Georgia on the third day of his visit to the United States (US).
"Kenya welcomes Coca-Cola's announcement to invest Ksh23 billion ($175 million) over the next five years to expand its operations in the country," he announced on his social media handles.
The investment represented a significant milestone for both Coca-Cola and Kenya. Coca-Cola, a familiar presence in Kenya for decades, was viewed to be deepening its commitment to the country's growth and development.
Back home, news of Coca-Cola's expansion sparked optimism and excitement. From Nairobi's bustling streets to rural villages, people envisioned a future brimming with possibilities, viewing Kenya not just as a consumer of global goods but as a key player in the international marketplace.
Coca-Cola, which opened its first bottling plant in Nairobi 76 years ago, currently employs 3,000 Kenyans directly and another 37,000 indirectly.
