The Kenya Revenue Authority (KRA) has exempted petroleum products from the increase in excise tax due to the implementation of the inflation adjustment.
Speaking during the launch of the 2022 Taxpayers’ month, KRA Commissioner General Githii Mburu noted that the tax agency has already issued a legal notice to effect the change.
“It wil affect excisable products other than petroleum products.All the other excisable products, we will make the adjustments. The only category we are going to leave out is petroleum products because of the currently very high prices of fuel,” Githii Mburu.
The Excise Duty Act 2015 proposes an adjustment in excise duty yearly in consideration of the country’s cost of living.
In relation to this, Mburu had earlier made a communication stating that KRA will adjust the rates on items affected by the excise duty using the average inflation rate of the fiscal year 2021/2022 of six decimal three per centum (6.3 per cent) as determined by the Kenya National Bureau of Statistics (KNBS).
This will force Kenyans to dig deeper in their pockets to purchase goods such as bottled water, beer, juices, wine and chocolate.
Other goods affected by the tax increment are motor vehicles in addition to services such as telephone and internet data services, fees charged for money transfer services and fees charged by financial institutions.
The adjustments signal a tough time ahead for Kenyans who are already grappling with the high cost of living after the country’s inflation in September hit a record high of 9.2 per cent amid a continued increase in the cost of food, fuel and housing.
This comes even after the Bar Hotels Liquor Traders Association of Kenya (BAHLITA) had urged the government not to increase the excise duty on alcoholic drinks as it would cripple their already struggling businesses following the Covid-19 pandemic that compelled their closure.
The new taxes will see a bottle of water go up to Sh7.02 from Sh6.6 per litre, while juice sellers will have to part with Sh14.14 for every 12 litres, up from Sh13.3.
On the other hand, the tax for every two beer bottles or a litre will increase from Sh134 to Sh142.4, whereas filtered cigarettes will be Sh4.06, up from Sh3.82.