(3 minutes read)
· The Kenya Revenue Authority (KRA) has increased the prices of a wide range of goods including fuel, bottled water, juice and beer
from July 1 following imposition of new taxes on the products
· The KRA will increase excise duty chargeable on at least 31 goods by about 5.5 percent, raising retail prices from next month
onwards
· A major item that will be impacted by the forthcoming excise hike is fuel prices, which is set to increase by Sh1.16 at the pump as dealers’ inflation adjusted excise duty rises to Sh22.07 a litre from the current Sh20.91
The Kenya Revenue Authority (KRA) has increased the prices of a wide range of goods including fuel, bottled water, juice and beer from July 1 following imposition of new taxes on the products. The KRA will increase excise duty chargeable on at least 31 goods by about 5.5
percent, raising retail prices from next month onwards. The decision of the authority is in line with the law that demands excise duty be revised upwards in tandem with the cost of living measure or the average rate of inflation in the 12 months through June.
Already the consumers are hard pressed about the impact of the Covid-19, which disrupted the supply chain, making goods scarce and
pricey. The new excise tax to be effective from 1 July will push up the prices. The increase in prices is coming at a time when there are massive job cuts due to scaling down of business activities due to lockdown coupled with demand compression. A major item that will be impacted by the forthcoming excise hike is fuel prices, which is set to increase by Sh1.16 at the pump as dealers’ inflation adjusted
excise duty rises to Sh22.07 a litre from the current Sh20.91. Kerosene and diesel prices are set to increase by Sh0.60 a litre.
All sections of businesses, including manufacturers have objected to the imposition of higher excise duty since it would lead to price
instability and market disruption. They feel that it would erode the investment prospects in the country since the investors naturally
prefer low tax regimes. They are suggesting that the increment in the taxes should be staggered over three years so that the taxpayers and
the general public will not feel the pinch of the increase.
