It is a mistake: MP Robert Mbui on CS's Mbadi's proposal to reintroduce Eco Levy

On Sunday, August 18, CS Mbadi suggested bringing back some tax proposals such as Eco-Levy on most goods that were not contentious, adding that sensitive products such as sanitary pads would be exempted. 

The levy targets products that are deemed to have a negative impact on the environment such as technological products, telecommunication products, plastic packaging materials among others. 

MP Mbui, during an interview on Daybreak, urged CS Mbadi to listen to his predecessor, Njuguna Ndung’u who criticised the notion of imposing higher taxes. 

During the handover to CS Mbadi, former CS Ndung’u said that increasing tax rates doesn’t necessarily lead to collecting higher revenue. 

"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 explained. 

"Everybody who's running their business and has a little technology will have to pay something extra. Something he was told by his predecessor is to be very careful. Kenya has a problem on cost of living and poverty. He was told "when you increase taxes, it doesn't necessarily mean you will raise more."

He referenced a law in Economics, known as the law in Comparative advantage, saying that Kenya should focus on producing products they have an advantage in and import the rest to create a balance. 

“There are people who argue that when you levy these things, you make it hard for people to import and this supports local industries. Basic economics teaches us the law of comparative advantage that means you as a country should focus on products and services that you have an advantage of producing and import the rest so that we can balance out.”

CS Mbadi recently confirmed reintroducing 47 amendments to raise Ksh.150 billion to fill the deficit caused 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 said.