Consumers will dig deeper into their pockets to buy a number of commodities as a new higher tax regime on bottled water, juice, beer, cigarettes and used cars takes effect.
The National Treasury set December 1st as the commencement date. Generally, the excise duty will push prices up by at least Ksh10. The government enforced the Excise duty Act 2015 after legislators’ amendments were rejected on October 28.
The national government targets to raise additional revenue of Ksh25 billion through the tax charges. National Treasury gazette notice dated 25th November says: “In exercise of the powers conferred by section 1 of the Excise Duty Act, the Cabinet Secretary for the National Treasury appoints the December 1, 2015 to be the date the Act shall come into operation.”
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The excise duty on food supplements has also been fixed at 10 per cent. Other affected consumers are used car importers who will now pay Ksh200,000 excise tax per unit aged more than three years and Kshh150,000 for that less than three years old.
Beer lovers will also pay more as the levy rises to a flat rate of Ksh100 per litre from today’s Ksh70 per litre. MPS had reduced the excise duty on bottled water to Ksh5 from Sh10. Cigarettes will see an increase in tax to Ksh2, 500 per 1,000 sticks (mille) from the present Sh1,200 per mille.
Motorcycles transport business, popularly called Boda Boda, has also been hit as the new law spells out a Ksh10, 000 duty. In his response to Parliament’s amendments to the bill, President Uhuru Kenyatta said deletion of some items could affect national revenue collection.
“The deletion of the item (fruit juices, cigarettes, motor vehicles, motor cycles) will, therefore, adversely affect the revenues to be collected making it inconsistent with the approved fiscal framework and Division of Revenue Act.”
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