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Cigarette firm seeks review of tax laws

By | March 31st 2012

By Macharia Kamau

Cigarette maker Mastermind Tobacco wants the Government to put in place a law to solely regulate excise tax regime, to prevent the yearly change in pricing that cigarette manufacturers have had to grapple with.

Excise tax, popularly referred to as sin tax, is taxation on luxury items like tobacco products and alcohol and is usually deemed as a punishment to consumers rather than attempts by Government to increase revenue base.

In a letter to the ministry of finance dated March 9, the firm wants enactment of the Kenya Excise Tax Act that it said should set up a framework for government to charge excise tax as opposed to the current situation where this is at the discretion of the minister of finance.

Mastermind noted that such a manner of administering excise tax gave room for emotions when the minister was making such decisions.

"The long pending Kenya Excise Act ought to be enacted to lay down the legal basis for excise tax in Kenya. The act ought to define the various categories of excisable goods, define the harmonised rates for all excisable goods and harmonise common procedures and standards," said corporate affairs manager Josh Kirimania.

The firm said such a law would remove the current ambiguity.

"It will also minimise KRA’s involvement in the operations of licensees, provide clear monitoring framework and remove overlaps," said Kirimania.

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