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Kenya’s Excise duty collections for the first half of the current financial year grew by a single digit for the first time in five years. This has led to President William Ruto undertaking fresh reform measures. Tax collections from the sale of excisable goods like beer, spirits, cigarettes, mineral water, juice, cosmetics, airtime, and internet use rose 5.38 percent between July and December 2022
Kenya’s Excise duty collections for the first half of the current financial year grew by a single digit for the first time in five years. This has led to President William Ruto undertaking fresh reform measures. Tax collections from the sale of excisable goods like beer, spirits, cigarettes, mineral water, juice, cosmetics, airtime, and internet use rose 5.38 percent between July and December 2022.
Recently, Dr Ruto publicly castigated top officials at the Kenya Revenue Authority for alleged collusion with rogue traders to defraud the exchequer of billions of shillings annually, particularly the collection of excise duty. Data compiled by the National Treasury shows excise tax receipts for the six months amounted to Sh130.34 billion compared with Sh123.68 billion the year before but fell short of the target by Sh8.69 billion.
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The collections grew at the second slowest pace, overtaking payroll taxes which expanded by 5.1 percent to Sh220.88 billion indicating a pick up in the formal job market. Firms selling goods, which attract excise duty have, nonetheless, linked the slowdown in the collection to higher rates largely applied to goods and services considered as a demerit goods category, harmful to the health of the society or morally suspect hence the term ‘sin tax’.
