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Alcohol, beauty products to cost more as KRA set to adjust prices

Kenyans could soon pay more for alcohol, juices, cosmetics, and cigarettes as the Kenya Revenue Authority (KRA) seeks to increase the cost of excise duty stamps by 300 percent.

KRA has a target of collecting Sh3 trillion this year that the government set in a bid to reduce the country’s debt burden, which currently stands at Sh7 trillion.

The Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 proposes to raise the stamp affixed on a beer bottle is set to double to Sh3 from Sh1.50, while those for spirits, wines and tobacco products are set for a 79 percent rise to Sh5 from the current Sh2.80 per stamp.

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The cost of cosmetics will go up from 60 cents per stamp to Sh2.50, a margin of 317 percent, while the stamp fee for fruit juices and non-alcoholic beverages such as sodas will go up by 267 percent to Sh2.20 from 60 cents.

Traders of other non-alcoholic beverages, not including fruit and vegetable juices, fruit juices (including grape must), and vegetable juices unfermented and not containing added spirit, will now pay Sh2.20 per excise stamp from Sh60 cents.

Producers and importers will likely pass down these higher taxes to consumers who are already burdened by the high cost of living.

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Kenyans are already paying higher prices for beer, juice, wine, water, and chocolates after KRA increased the excise tax for these products two months ago citing inflation.

This is the first review of the stamp prices since 2017, with the Treasury in line to rake in extra billions from the estimated 2.9 billion excise stamps that the Kenya Revenue Authority (KRA) sells for mandatory affixing on excisable products.

Last year, traders in the alcohol value chain protested plans by KRA to adjust excise taxes for various products from October 1, 2022, claiming the step will kill more than 35,000 jobs and lead to a loss of Sh15.7 billion in income by workers.

The taxman had indicated excise duty on the products will increase by 6.3 percent effective next month in line with average annual inflation.

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