MP Mbui Opposes Eco-Levy in Tax Debate

Kathiani’s Member of Parliament, Robert Mbui, has openly expressed his concerns to Treasury Cabinet Secretary John Mbadi about the consideration to reimpose specific tax measures initially discarded in the 2024 Finance Bill, stating that such a move could further detriment the nation’s economic state.

CS Mbadi, in a public statement on Sunday, August 18, hinted at the revival of specific tax initiatives like the Eco-Levy on numerous goods, excluding contentious ones, with an assurance that essentials like sanitary pads would not be affected.

The levy is designed to apply to products perceived as environmentally harmful, including technological and telecommunication items and plastic packaging.

During a discussion on the “Daybreak” show, Mpui called on MBadi to heed the advice of Njuguna Ndung’u, his predecessor, who has been vocal against increasing taxes. Ndung’u, upon transferring duties to Mbadi, articulated that tax rate hikes do not guarantee enhanced revenue collection.

MP Mbui articulately shared his concerns during the interview, saying, “One of the things we found contentious is the Eco Levy. For the CS, a week into office to be telling us is the right way to go. When I was questioning, I was talking about doublespeak. People must be able to stand their ground firmly, and if you believe in something, let us know that you believe in it. This Eco levy is a mistake.”

He continued to critique the broad implications of the policy, especially on small businesses engaged in technology, underlining the cautionary advice given to Mbadi about its potential to exacerbate the cost of living and poverty issues in Kenya. He emphasized, “When you increase taxes, it doesn’t necessarily mean you will raise more.”

Referring to a fundamental principle of economics, the law of Comparative Advantage, Mbui emphasized the strategic imperative for Kenya to focus on producing and exporting goods where it has a competitive edge while importing others for the sake of a balanced economy.

CS Mbadi acknowledged plans to propose 47 amendments to generate Ksh.150 billion to mitigate the financial void left by the withdrawal of the Finance Bill 2024. “We have lined up 47 amendments, among them the eco-levy. We will, however, remove the ban on sanitary pads and other sensitive items,” he stated, acknowledging the targeted amendments while ensuring exclusions for essential goods.