Court bars KRA from increasing tax on beer

By , K24 Digital
On Mon, 27 Sep, 2021 14:32 | < 1 min read

Kenyans have been temporarily saved from more taxes after a Nairobi court barred the taxman from adjusting excise duty on at least 31 products. 

KRA had planned to increase the excise duty on fast-moving goods such as beer, fuel, bottled water, energy drinks, and juice beginning in October 1.

In a notice issued on August 10, Kenya Revenue Authority (KRA) Commissioner-General said the taxman would adjust the rate of excise duty using 4.97 per cent, as the average inflation rate covering the 2020/21 financial year.

However, High Court Justice James Makau on Monday, September 27 issued temporary orders quashing the decision by the Commissioner-General KRA to adjust excise duty rates.

According to Justice Makau, Kenyans will hurt more if KRA adjusts the excise duty rates on fuel as was proposed. 

"I find the application meets the threshold for interim orders. The petitioners have established they have a prima facie case with a likelihood of success," the judge said. 

If the new rates go through, a litre of petrol would rise by Ksh1.09, while diesel and kerosene will increase by Ksh0.566 per litre each.

The price of a packet of cigarettes will increase by Ksh3.20 in line with the rise in excise tax from Ksh66.20 to Ksh69.40, while the duty on bottled water will rise from Ksh3.31 to Ksh3.47 per litre.

After the introduction of the Excise Duty Act in December of 2015, the excise duty on beer increased from Ksh100 per litre to Ksh116 per litre and wine from Ksh150 per litre to Ksh198.34 per litre and spirits from Ksh175 per litre to Ksh 265.50.