This archive report was first published on 8 November 2019.
Kenya Revenue Authority (KRA) is set to implement a new excise tax on non-alcoholic beverages, effective November 13, 2019. This move is expected to increase the price of bottled water by an average of KSh 7 per liter.
The new excise tax, which replaces the old charge of KSh 3 per liter, is expected to raise KSh 3.6 billion in revenue. This is part of KRA's efforts to reduce missed perennial revenue targets.
According to Henry Kabogo, chairman of the Water Bottlers Association of Kenya, the new tax will make water unaffordable for many Kenyans, particularly during economic hardships.
"The water that people use on a daily basis is going to be un-affordable. This means that under the economic hardships, people may choose to turn their contained spend away to more crucial goods," Kabogo said.
The new excise tax was first introduced in the Excise Duty Bill, 2015, but was not implemented due to litigation challenges. The new proposed excise rate of KSh 5 replaced the old charge of KSh 3 or an equivalent five/seven percent of the total product's cost.
