This archive report was first published on 30 September 2019.
On September 25, 2019, Kenya's Parliament passed a bill to increase the excise duty on alcohol and tobacco products to 21%, a move aimed at increasing tax revenue to bridge the Kenya Revenue Authority's (KRA) deficit.
The bill, which is waiting for Presidential assent, has been met with resistance from manufacturers who claim the move will have adverse effects on other members of the value chain, including retailers, wholesalers, and Small and Medium Enterprises (SMEs).
According to The Star, MPs approved a duty of KSh 12,624 per kilo of cigars containing tobacco or its substitutes, KSh 3,787 for every unit of electronic cigarette, KSh 3,157 on every mille of cigarettes with filters, and KSh 2,272 for every mille of cigarettes without filters.
Liquor manufacturers also bear the brunt of the new excise duty, with manufacturers who make liquor through fermenting fruits, such as wine, paying KSh 189 per litre, and manufacturers of alcoholic beverages above 10% alcohol concentration paying KSh 253 per litre.
British American Tobacco, Kenya Wine Agencies (Kwal), Alcoholic Beverages Association of Kenya (Abak) and Mastermind Tobacco filed a petition against the bill, lamenting on MPs' blind eye on their appeals.
“Significant and unpredictable excise increases will not reverse this trend. By having the highest excise rates in East Africa, Kenya is already a haven for illicit cartels,” said the manufacturers.
