This archive report was first published on 23 April 2020.
Kenya's alcoholic drink brewers are facing a fresh challenge as the country grapples with the economic impact of the Covid-19 pandemic. The brewers are protesting a 25 percent excise duty on glass bottles introduced through the Business Laws (Amendment) Act, 2020.
On April 23, 2020, the brewers, including Kenya Breweries Limited (KBL), Coca-Cola beverages Africa, UDV Kenya Limited, Kenya Wines Agency Limited (KWAL), and Trufoods Limited, presented a memorandum to the Departmental Committee on Finance and National Planning, chaired by Kipkelion East MP Joseph Limo.
The brewers argued that the excise duty would be punitive, as the industry relies heavily on imports. They also claimed that local glass-making companies lack the capacity to meet increased orders due to a lack of modern glass technology.
According to the brewers, the protection of glass manufacturing companies in Kenya violates the principle of equity and fairness in the taxation of excisable goods. They also warned that the duty would increase the cost of alcoholic products and soft drinks beverages, which would have a negative impact on household disposable income during the Covid-19 pandemic.
The Kenya Revenue Authority (KRA) had pushed for the amendments to boost its war on an alcohol cartel evading tax through uncustomed liquor and to source bottles from within the country. However, insiders at the KRA headquarters in Nairobi revealed that bottle trade has been a key link in the multibillion tax evasion in the alcohol sector.
