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Beauty tax: KRA puts a price tag on glamour, introduces excise duty on cosmetics

The Kenya Revenue Authority (KRA) has announced the introduction of excise stamps for cosmetics in the country, which is expected to affect the cost of cosmetics.

The authority said the move follows several requests to postpone the rollout date, initially set for July 1, as manufacturers and importers asked for more time to prepare adequately.

“The KRA therefore wishes to inform manufacturers, importers and other stakeholders involved in the distribution and supply of cosmetics and beauty products that the roll-out has been postponed to a later date, which will be communicated in due course,” the KRA said.

The move follows the High Court’s decision to dismiss a petition by the Law Society of Kenya (LSK) challenging the KRA’s new tax categories.

Cabinet Secretary for Finance Njuguna Ndung’u had proposed the Excise Duty (Excisable Goods Management System) (Amendment) Regulations for 2023, which is aimed at improving government taxes and meeting its plans.

According to the Excise Duty (Amendment) Bill 2020, the excise duty rate for cosmetics and beauty products is 10 percent, but this will change with the implementation of the CS amendment.

This means each cosmetic and beauty product will cost the importer or manufacturer Sh2.5 to get the KRA stamp.

Also, the fruit juices and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter, will pay Sh2.2 per stamp.

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Bottled or similarly packaged waters will pay Sh0.5 per stamp while other non-alcoholic beverages, not including fruit and vegetable juices will pay Sh2.2 per stamp.

Beer, cider, perry, mead, opaque beer, and mixtures of fermented beverages with non-alcoholic beverages will pay Sh3 for a single stamp, the same amount paid for spirituous beverages of an alcoholic strength not exceeding 6 percent.

However, compounded spirits of alcoholic strength exceeding 6% percent will be Sh5 per stamp, the same amount applicable for wines, including fortified wines and other alcoholic beverages obtained by fermentation of fruits.

Also, cigars, cheroots, cigarillos containing tobacco or tobacco substitutes, cigarettes containing tobacco or tobacco substitutes, and other manufactured and manufactured tobacco substitutes; “homogenous” and “reconstituted tobacco”; tobacco extracts and essences will pay Sh5 peer stamp.

Liquid nicotine for electronic cigarettes and products containing nicotine or nicotine substitutes intended for inhalation without combustion or oral application but excluding medicinal products approved by the Cabinet Secretary responsible for matters relating to health, will cost Sh5 per stamp.

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