•KRA is expected to adjust the rate of excise duty using 4.97% as the average inflation rate covering the 2020/21 financial year.
•Stop Crime Kenya (StoCK) has warned that an increase in excise rates will fuel illicit trade in the country . Production at the East African Breweries Limited plant in Nairobi/FILE Less than two weeks since pump prices of fuel hit a historic high, causing a countrywide uproar, consumers in Kenya are facing yet another increase on at least 31 products.
This comes with the adjustment of the excise duty rate by the Kenya Revenue Authority (KRA), a move that will force manufacturers and importers to pass costs to consumers.
It will see fast-moving excisable goods such as fuel, beer, cigarettes, bottled water, energy drinks, and juice cost more from October 1, with consumers who are reeling from the effects of Covid-19, amid reduced spending power, forced to dig deeper into their pockets to access these products.
In a notice issued on August 10, Kenya Revenue Authority (KRA) Commissioner General said the taxman would adjust the rate of excise duty using 4.97 per cent, as the average inflation rate covering the 2020/21 financial year.
As a result of the upcoming increases, consumers will pay Sh5.77 more for a litre of beer while prices for spirits will rise by up to Sh13.20.
A litre of petrol will rise by Sh1.09, while diesel and kerosene will increase by Sh0.566 per litre each.
The price of a packet of 20 cigarettes will increase by Sh3.20 in line with the rise in excise tax from Sh66.20 to Sh69.40, while the duty on bottled water will rise from Sh3.31 to Sh3.47 per litre.
This will force players such as the East African Breweries Limited (EABL), BAT and other local manufacturers to adjust their pricing upwards to remain profitable.
It will come barely three months after the beer manufacturer increased prices of its beer and spirits prices by between Sh5 and Sh20.Since the introduction of the Excise Duty Act in December of 2015, beer excise has increased from Sh100 per litre to Sh116 per litre (16% increase), wine from Sh150 per litre to Sh198.34 per litre (32% increase) and spirits from Sh175 per litre to Sh 265.50 (52% increase).These changes in alcohol taxes came off the back of a massive 43 per cent excise tax increase that was effected in 2015, with Kenya having the highest tax regime compared to […]