If a proposal by the National Treasury to increase the price of excise stamps by up to
four times is approved by parliament, consumers should prepare for a new round of
price rises on booze, juices, cosmetics, and cigarettes.
President William Ruto set the KRA collection goal of Sh3 trillion for this year in an
effort to lower the nation’s debt load, which is currently at Sh7 trillion.
“We ought to be able to get enough cash. Our GDP has increased by Ksh12 trillion, yet
KRA’s revenue growth last year was just approximately 14% of GDP. In the past, KRA
was successful in raising 18% of GDP. We would have raised an additional 400 billion
shillings if we met our goal today. In that situation, I anticipate KRA to collect $3 trillion
in the upcoming fiscal year,” the President said last year during a celebration of National
Taxpayers Month.
For the fiscal year 2021–2022, the taxman collected a record-high Sh2.031 trillion in
annual income; he is now seeking an additional Sh800 million through a number of
planned tax increases.
According to the Excise Duty (Excisable Goods Management System) (Amendment)
Regulations, 2023, stamp rates for cosmetics would increase from 60 cents to Sh2.50
per stamp, while those for fruit juices and other non-alcoholic beverages like sodas will
increase from 60 cents to Sh2.20.
Beer bottle stamp prices would also double to Sh3 from Sh1.50 while those for spirits,
wines, and tobacco goods will increase by 79% to Sh5 from the current Sh2.80 per
stamp.
Producers and importers will probably pass along these extra levies to consumers who
are already struggling with a high cost of living. Beer, juice, wine, water, and chocolates
are already more expensive in Kenya since the KRA hiked the excise tax on these items
two months earlier, blaming inflation.
Due to the changes, the tax on a bottle of water increased from Sh6.6 per litre to Sh7.02
and the tax on juice increased from Sh13.3 to Sh14.14 for every 12 litres. On the other
hand, the tax on sugar confections increased from Sh40.3 to Sh42.9 for every 36 kilos.
This is because the tax on cigarettes with filters and every two beer bottles or litre raised
to Sh142.4 from Sh134.
