Kenya's alcohol makers call for sobriety on tax

Treasury Cabinet Secretary Henry Rotich

NAIROBI, KENYA: Beer and spirits manufacturers are fighting a proposal to amend the Excise Duty Act to provide for annual tax increase on alcoholic beverages pegged on inflation.

Under their umbrella body the Alcohol Beverages Association of Kenya (ABAK), the manufactures want this proposal done away with.

They want a more sober approach adopted where a 2 per cent duty is pegged on the industry, without the need of reviewing it whenever inflationary pressure sets in.  

“We had started making gains against the excessive, volatile, unpredictable and indiscriminate excise regime in Kenya that is a catalyst for illicit trade to thrive,” ABAK Chairman Gordon Mutugi said.

“A more progressive view from industry is that Parliament ought to have enacted legislation that commits at least 2 per cent of the Sh140 billion excise contribution by alcohol industry towards enforcement by the Kenya Revenue Authority (KRA) in order to nab counterfeits and illicit brews,” he said.

The association pointed out that there was need for the Government to stop inflationary increase this year and provide more funding to fight illicit trade. This will ensure a level playing field for both imports and locally manufactured goods to support the manufacturing agenda.

“A fair tax regime should protect consumers, enhance tax compliance, increase tax collection for the Government and support business and job creation while ensuring tax compliance by all players. Unfortunately, this cannot be said about annual excise increase as proposed in the Finance Bill 2018,” says Mutugi.