Kenya Raises Duties On 31 Goods
The Kenya Revenue Authority (KRA) has increased the tax on excisable goods in line with the average inflation rate, despite pleas from manufacturers and importers to leave rates unchanged. The KRA’s excise duty inflation adjustment has upped rates by 4.94%, in line with the official annual inflation rate for the 2019/2020 financial year to 30 June 2020. In its official release, the KRA confirmed that the new tariff amounts have taken effect from 1 October 2020.
The new rate affects at least 31 products, including juices, wines and spirits, some imported chocolates, beer, bottled water, imported sugar confectionery, cigarettes and fuel. Specifically, the KRA will now collect an additional KES5.46 (US$0.05) duty on a litre of beer, cider, opaque beer and other beverages with alcohol content not exceeding 6%; and for a kilogramme of powdered beer.
Duties on spirits rise by KES12.50 per litre to KES265.50 from KES253; and on wines duties have gone up by KES9.34 per litre, rising from KES189 to KES198.34. Fruit and vegetable juices have risen by KES0.55 to KES11.59 per litre from KES11.04. Bottled water has increased by KES0.27 per litre. The excise duty levied on sugar confectionery and for some chocolates has added KES0.99 and KES9.88 to total duty payable per kilogramme respectively.
The Kenya Association of Manufacturers and other industry players have called on the tax authority to pause the implementation of the new rates, citing the substantial challenges that stakeholders are already facing from the Covid-19 pandemic.
They have also criticised the authority for failing to consult the National Assembly prior to setting new rates, as is allegedly required by the country’s Finance Act, 2020. The KRA, however, has defended its actions saying that the adjustment for inflation is required by law under Section 10 of the Excise Duty Act, 2015.
