Nema plans punitive taxes to control plastic bag use
Recycled plastic handbags. Private sector players have been piling pressure on the government to reduce duty on imported paper to make products cheaper. Photo/ROBERT NYAGAH
A policy anchored on punitive taxes to control the use of plastic bags is being drafted at a time when prices of alternatives are rising.
The National Environmental Management Authority (Nema) has embarked on consultations with plastic bag manufacturers and users in the hope of coming up with a policy on plastic management that could see the reintroduction of punitive taxes on flimsy plastics.
The consultations follow a recent request made by Nema chairman Francis ole Kaparo to the plastic sector players asking them to come up with fresh proposals to be incorporated in the anticipated plastic waste management policy.
“This policy is intended to look at the environmental issue of plastic management in totality, including its financing,” said Benjamin Langwen, Nema’s director in charge of Compliance and Enforcement.
Nema has already instructed the Kenya Bureau of Standards to raise its gauge on plastic from 30 to 60 microns, setting the stage for a fresh round of negotiations with private sector players who say the demand for flimsy plastics is driven by high cost of paper alternatives.
Under the anticipated policy, any manufacturer producing flimsy bags will have to pay a higher excise duty of 120 per cent, up from the current 50 per cent.
“This policy also seeks to ensure that some of the money collected by Treasury on plastics is shared out with entities that are directly engaged in plastic management,” said Mr Langwen.
The search for a plastic management policy comes at a time that private sector players have been piling pressure on the government to reduce duty on imported paper to make its related products affordable.
Under the EAC’s Custom Management Act (ECMA), paper imported into the region as a finished product faces a common external tariff of 25 per cent.
This duty however drops to 3.5 per cent if the custom officials are convinced that it is for use as a raw material.
Kenyan manufacturers says this protective rule – which has become even more punitive as petroleum prices drive up the cost of transport from Mombasa Port – has become irrelevant since PanPaper which it shielded as it supplied the region with 93,000 tonnes of paper every year is now dormant.
“The government needs to give paper a proper classification to ensure those who import it for further processing do not end up incurring higher cost burden,” Kenya Association of Manufacturers’ CEO Betty Maina told the Business Daily in a previous interview.
In recent weeks, similar sentiments have also been expressed by individual paper converters such as Tetra Pak, a major supplier of packaging material in the region which has turned to imports following paper’s closure.
Compared to her neighbours, Uganda imports her paper under a special duty exemption scheme granted by EAC secretariat while Tanzania relies on her SADC membership to obtain it duty free from South Africa.
While the plastic management policy does not anticipate banning the use of flimsy plastic like the government attempted unsuccessfully in 2007, the new KEBS standard raising the gauge to 60 micron means it cannot qualify for packaging goods for cross border trade.
Churned out
The proposed regulation seeks to build on past attempts that have traditionally targeted shopping bags while turning a blind eye to industrial plastics that have turned most cities in the region into an eyesore.
A recent study by Kenya Institute for Public Policy Research and Analysis indicates that at least two million lighter plastic bags are churned out by shopping outlets in Nairobi alone.
The punitive tax proposed by Nema is also set to put Kenya at par with Tanzania and Uganda which have strictly applied the region’s agreed excise duty rate of 120 per cent on flimsy plastic in the last five years.
In the renewed search for a final policy on plastic management, the private sector is said to favour increased investment in waste recovery by individual firms.
The Kenya Bureau of Standards (KEBS), public and the local authorities are also taking part in the talks.
