Consumers of excisable goods could pay more to access products as National Treasury proposes to increase duty .
National Treasury Cabinet Secretary Njuguna Ndung’u has proposed an upward adjustment of fees on excise stamps for cigarettes and other tobacco substitutes to five per cent from 2.8 per cent.
Wines and other alcoholic beverages obtained by fermentation of fruits will also attract a further five percent in excise duty.
That of fruit juices and cosmetics will also go up by 2.2 per cent and 2.5 per cent, from 0.6 per cent and 0.6 per cent, respectively.
Other affected are spirits with strength not exceeding six per cent, electronic cigarettes and beer, as the government seeks to squeeze more revenues from sin tax to fund its budget.
Bottled water has however been spared from the proposed adjustments.
This comes barely eight months since prices of these goods increased on higher excise tax, after Parliament passed the Finance Bill 2022, in June last year.
Wines have since then been attracting duty at the rate of Sh229 per litre from the current Sh208.20, with retailers increasing shelf prices by up to Sh50 on a 750ml bottle.
Spirits with an alcoholic per centage of more than 6% are attracting excise duty at Sh335.30 per litre, which went up from Sh278.70.
Beer products whose alcohol content exceeds six per cent saw excise duty go up to Sh134 per litre, from Sh121.85.
This saw bars and restaurants increase product prices by between Sh12 and Sh20.
From July 1, tobacco substitutes including non-combustible tobacco has been attracting excise duty at Sh3,750, more than double the previous Sh1,500.
Excise duty has been a low hanging fruit for the government administrations when seeking more revenues.
The financial year 2023/24 budget has been set at Sh3.64 trillion, up from the current Sh3.3trillion budget for the financial year ending June 30.
“As we prepare the financial year 2023/24 and the Medium Term, emphasis will be on aggressive revenue mobilisation including policy measures to bring on board additional revenue,” Ndung’u said last week during the public hearing for the 2023/24 and the medium-term budget preparation event, in Nairobi.
President William Ruto wants Kenya Revenue Authority (KRA) to double its collections from Sh2.1 trillion to over Sh4 trillion.
The current financial year’s revenue target for KRA is Sh2.14 trillion.
