The Associated Battery Manufacturers (ABM East Africa) has expressed fears of possible closure in Kenya after a 61-year run if the Finance Bill 2024 is passed into law.
In a statement, the company’s Chief Executive Officer (CEO) Guy Jack indicated that the Finance Bill proposed an ECO tax to the tune of Ksh750 for every kilo of battery.
ABM- which is known for its products including Chloride Exide, stated that the retail prices of batteries will increase drastically, greatly affecting the industry.
“One can quickly see that this is completely unsustainable and will result in the immediate destruction of the industry and subsequent closure of the entire Associated Battery Manufacturers Group,” the statement read in part.
At the same time, the CEO clarified that Associated Battery Manufacturers is not opposed to a well-considered ECO tax.
However, it has asked the government to demonstrate that the funds will be used specifically for environmental improvements directly related to the taxed products.
Also Read: Banks Send Stern Message to Ruto Over Proposed 16% VAT
Price Break Down of Car Batteries with Proposed Tax in Finance Bill 2024
If the proposed ECO tax in the Finance Bill 2024 is implemented, the battery manufacturer indicated that the price of a small 12kg motor vehicle lead acid battery which retails at a price of Ksh8,500 will hike with a margin of Ksh9,000.
Subsequently, with the tax, a small car battery will retail at Ksh17,500, translating to an increase of 120 percent of the current selling price.
“In regard to the proposal for the introduction of an ECO tax to the tune of Ksh750 per kilo of battery weight.
“A small lead acid battery for a motor vehicle is 12kg, with a retail price of Ksh8,500. The Eco tax for this small battery will translate to an ADDITIONAL Ksh9,000 plus Value Added Tax (VAT),” ABM explained.
Moreover, the amount will translate to an increase of 120 percent increase of the current prices. On the other hand, for a large solar battery weighing 60 kilograms, the ECO tax will add an extra Ksh 45,000.
Also Read: Kenyans Asked to Give Views on Proposals to Slap Taxes on Bread & M-Pesa
Banks Lamentations of the Proposed Taxation
Earlier, Kenyan banks through the Kenya Bankers Association (KBA) warned that a proposed 16% Value Added Tax (VAT) on financial transactions in the Finance Bil 2024 would pose a huge risk to economic growth including increasing fuel prices and weakening the Kenyan shilling.
The association argued that bank charges should not be considered VATable since banks do not deliver any goods to customers,
In addition, KBA warned that the increased cost of banking to customers will prevent financial inclusion and especially affect low-income individuals and small businesses.
This, added the statement, will significantly impact affordability and accessibility of banking services as well as the financial stability of the country.
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