The Kenya Revenue Authority (KRA) has removed excise duty on bottled water following changes introduced under the Finance Act, 2026, a move that is expected to lower compliance costs for manufacturers and ease the tax burden on the industry.
KRA announced that the new tax measure took effect on July 1. From that date, bottled water manufactured or imported into Kenya is no longer subject to excise duty.
“Excise duty on bottled water is removed with effect from 1st July, 2026,” KRA said in the notice.
The change also means bottled water will no longer require excise stamps, ending a long-standing requirement that manufacturers and importers affix digital stamps to their products before they enter the market. The removal of both the tax and the stamps is expected to simplify operations for businesses while reducing production costs.
Although the development could eventually lead to lower retail prices, consumers may have to wait to see whether manufacturers pass the savings on. In Kenya’s retail market, tax cuts do not always translate into immediate discounts, leaving shoppers hopeful but cautious.
KRA said the Commissioner will issue detailed guidelines on the return of unused excise stamps and the decommissioning of digital stamps. The guidance will help manufacturers transition to the new system following the tax change.
The authority also reminded manufacturers that their tax obligations for June remain unchanged despite the new law. Licensed manufacturers must file their Excise Duty Returns for June 2026 and pay any outstanding taxes by July 20.
“Manufacturers are reminded of their obligation to submit their Excise Duty Returns for June 2026 and pay the taxes due by 20th July, 2026,” the notice stated.
The removal of excise duty is among the latest tax reforms under the Finance Act, 2026.
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