More Pain To Consumers As KRA Plan To Hike Excise Duty By 6.3pc

Kenyans should brace for costlier maize flour, sugar, and rice among other commodities from October 1 this year.

The Kenya Revenue Authority has said that it will increase excise tax by 6.3pc in the next 30 days. The taxman says the move is informed by rising inflation that rose to a 62-month high of 8.5pc in August.

The hike is coming at a time when Kenyans are struggling with a record high cost of living which has accelerated in the last 12 months

“The specific rates will be adjusted using the average inflation rate for the financial year 2021/2022 of 6.3pc, as determined by the Kenya National Bureau of Statistics, and the adjusted specific rates will be effective from October 1, 2022,” said KRA.

The excise tax adjustment is in line with the 2015 finance law that gives the tax agency powers to revise duty upwards in line with officials inflation records.

However, manufacturers have in the past lobbied against the move due to the effects of Covid-19 and the ongoing disruptions in the global economy.

The Kenya Bureau of Statistics said on Wednesday that inflation hit an all-time high of 8.5pc in August up from 8.3% recorded in July 2022.

KNBS said the rise in inflation was a result of rising fuel and food prices. Consequently as prescribed in the Excise duty Act of 2015, the Kenya Revenue Authority plans to impose a 6.3pc increment in tax as an inflationary adjustment on excisable goods and services by October 1st, 2022.

Among the goods to be subjected to the increment include bottled water, soft drinks, cigarettes, alcohol, fuels, and motor vehicles while services include telephone and internet data services, fees charged for money transfer services, and other fees charged by financial institutions.

KRA is calling on members of the public and manufacturers to submit their views on the inflation adjustment before the 16th of this month.