Finance Bill 2024: Multinationals, including Coca-Cola, challenge eco levy

American giant beverage manufacturer and distributor Coca-Cola has opposed sections of the Finance Bill 2024 that include tax proposals on 10% Excise Duty on both locally manufactured and imported plastics as well as the Eco-Levy. 

Telecommunication and technology service providers who featured in Thursday’s public participation session, warned of a looming internet distribution disruption, as a result of expensive operational costs stemming from an increase in digital taxation. 

Appearing before the National Assembly Finance and Planning Committee, the senior managers of Coca-Cola say the new tax will create a volatile business climate, erode investor trust and hinder strategic planning. 

Treasury seeks to delete the word ‘imported’ in section 42(G) of the excise duty act, which means the 10% will apply both to locally manufactured and imported plastics, a move strongly opposed by Coca-Cola. 

“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.“This levy will include the cost of doing business.”

In addition, directors of the American giant beverage manufacturer and distributor have termed the newly introduced Eco-Levy double taxation for essential Industry players.

“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.

Telecommunication and Internet Service Distributors led by Safaricom and Airtel under TESPOK, warned of a looming Internet Distribution Paralysis, as a result of expensive operational costs stemming from a proposal to increase Digital Tax.

“I was in the US with the president’s delegation and was given money by a Kenyan who felt that because the tax regime wasn’t sure of the charges, she insisted I carry cash to her mother…that will happen a lot and is not the safest way of transmitting funds. We have to factor in the local mwananchi,” said Tespok CEO Fiona Asonga.

Stakeholders in the Packaging industry led by the Packaging Producer Responsibility Organization also opposed the Eco-Levy, stating that it will lead to increased operational costs that will be passed to the primary consumer. 

“This is double taxation, and if we are not very careful, some of the companies will be moving to other countries,” Packaging Producer Responsibility Organization Chair Kimani Rugendo said.

A total of 106 entities have tabled their submissions before the Parliamentary Committee with over 40 others expected to feature in the public participation excise which enters its home stretch this weekend.