Beer prices set to go up as KRA adjusts excise rates

NAIROBI, Kenya, Nov 9 – The Kenya Revenue Authority has reviewed upwards the excise rates of several goods including beer and ciders, wines and alcohol spirits, fruit juices and cigarettes using the average inflation rate for the 2020/2021 financial year which is averaged at 4.97 per cent.

The new rates which were effective November 2 were published on Tuesday and will affect manufacturers and importers of excisable goods who may be forced to adjust the prices upwards.

“Kenya Revenue Authority would like to inform manufacturers and importers of excisable goods and the public that the rates of excise duty on excisable goods that have a specific rate of duty have been adjusted using the average inflation rate for the 2020/2021 financial year of 4.97% as required under Section 10 of the Excise Duty Act, 2015,” the firm said.

The new excise duty for beer including cider non-alcoholic beverages of an alcoholic strength not exceeding 6 per cent was raised from Sh 116.08  to Sh 121.85 per litre.

The rates of wines rose to Sh 208.20 up from Sh 198.34 per litre while those of fruit juices and vegetable juices were raised from Sh 11.59 to Sh 12.17 per litre.

Other excisable goods which have been affected include bottled/packaged waters whose rates rose from Sh 5.74 to Sh 6.03 per litre, electronic cigarettes whose rate rose from Sh 3,974.08 per unit to Sh. 4,171.59 per unit while cigarettes without filters which were revised from Sh2,384.24 to Sh 2,502.74.

The excise duty of Motorcycles with the exemption of motorcycle ambulances and locally assembled ones rose from Sh 11,608 to Sh 12185.16 per unit.

KRA had clarified that the rates are effective from November 2 after Finance consulting firm Pricewaterhouse Coopers (PwC) had warned of possible confusion over lack of clarity on its effective date.

In a Tax Alert published by PwC’s tax consultants, they warn that “this is likely to create confusion as the effective date could be subject to varying interpretation, which is bound to present compliance challenges to businesses and disputes with the tax authority.”