Bar owners want proposal to increase tax on Senator Keg dropped

The association of bar owners has asked for an extension of opening hours, free tests, and for the Government to drop the proposal to increase the tax on Senator Keg as the country works to reverse the economic slowdown.

The Bars, Hotels, and Liquor Traders Association has also asked for more establishments to be allowed to open and serve takeaways and for wider consultations as the Government works out ways to jumpstart the economy.

Boniface Gachoka, the secretary-general of the association, said the proposal by the National Treasury to increase Excise Duty on Senator Keg would result in the resurgence of illicit brews and the loss of jobs for more than the 200,000 people.

He said failing to come up with measures to protect the alcohol beverage sector would further complicate matters for a sector whose activity has been severely affected by the Covid-19 pandemic.
“A change to remission of 60 percent may be proposed and discussed after the pandemic lapses but for now, such a huge change would gravely harm the industry, negatively impact the economy and lead to the resurgence of consumption of illicit brews,” said Mr Gachoka.

The proposal by the Treasury to reduce the remission on Excise Duty that Senator Keg from 80 percent to 60 percent would result in an increase of the price per serve by up to Sh10.

Treasury Cabinet Secretary Ukur Yatani published the notice for the public to submit their views before the amendment to the Excise Duty regulations is taken to the National Assembly for approval.

The move has echoes of 2013, when the Treasury reduced the remission from 100 percent to 50 percent, which resulted in a resurgence of illicit alcohol, with the consumption so high that the President ordered a crackdown on it in 2015.

“When the remission was increased again in September 2015, fatalities arising from the consumption of illicit brew declined,” said Mr Gachoka. “It is therefore predictable that the linked increase in price arising from a reduction in Excise Duty remission will result in the resurgence of illicit brews.”

Simon Mwangi, the association’s chairman said that contrary to the perception by the Treasury, which has been expressed by the Principal Secretary, Julius Muia, demand for Senator Keg is not like that of other classes of alcohol.
Because its target market is lower-income earners, an increase in the price would mean that it becomes unaffordable, and drinkers would have to turn to cheaper and most likely unsafe alternatives.

Mr Mwangi said the Government should set up a task force composed of members of various representatives across the sector to deliberate on plans to revive the economy.

“The association has 54,000 bar owners and hoteliers and thus should be included in any progressive meeting as we are the voice of the people,” he said.

 He said that given the huge support the Government has received, it should be easy to make the testing for Covid-19 required for bar, restaurant and eateries’ staff before they are allowed back to work should be speeded up.

“The test currently costs Sh10,000 and that is already too high, especially given that most of us and our employees have been out of work,” said Mr Mwangi.