Price Of Smartphones, Diapers Likely To Go Up After Govt Proposes New Tax

Kenyans could risk paying even more for new smartphones among other items as the government seeks to introduce a new levy for manufacturers and importers to protect the environment.

As proposed in the Finance Bill 2024, the National Treasury is aiming to introduce an Eco Levy which would compel manufacturers and importers of various goods, including diapers, rubber tyres and electronics to “pay for the negative environmental impacts of the goods” they produce or ship into Kenya.

The Eco Levy implies fees charged in advance to all electronic communication equipment to take care of the disposal of associated equipment after reaching its end of life.

"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.

President William Ruto talking on the phone during a past event. /FILE

The Finance Bill 2024, which stipulates the tax measures that will finance the 2024/2025 Budget, stipulates that the Eco Levy will simply be imposed on goods that contribute to noise, soil and air pollution.

One of the most common goods set to be affected by the levy is smartphones in the mobile phone category, whose proposed levy was set at Ksh225 per unit, a matter which could force smartphone makers to raise the cost of their products at a time Kenya is witnessing a high uptake of smartphones.

Another item that would be commonly affected by the Eco Levy is diapers, with a proposed charge of Ksh150 per kilogramme, a move that would also likely push up the cost of diapers.

Rubber tyers used in vehicles, motorcycles, and bicycles will also be levied, with the levy for rubber tyers proposed at Ksh1,000 per unit. Other products set to be affected include:

1. Office machines at Ksh98/unit
2. Calculating machines at Ksh225/unit
3. Automatic data processing machines at Ksh225/unit
4. Arts & accessories at Ksh98/unit
5. Microphones & speakers at Ksh98/unit
6. Monitors & projectors at Ksh1,275/unit

"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.

Because manufacturers and those importing their products will be paying more for their items, the retailers and business owners could be forced to increase the prices of the goods as they push down the additional costs to the consumers.

The cost of smartphones had for instance gone up with the introduction of the Blank Tape Levy, among others. Should the Eco Levy proposal be realised, the price of the smartphone could be out of reach for most Kenyans, considering that the government embarked on assembling smartphones locally.

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, with the levy charged between Ksh788 and Ksh3,155.

Other countries with environment-friendly taxes include Seychelles, Switzerland and Liechtenstein.