The Kenya Revenue Authority (KRA) has unveiled a new excise duty framework targeting various goods and services, a move prompted by the recent enactment of the Tax Laws (Amendment) Bill 2024 by President William Ruto. These changes, effective December 27, 2024, are poised to alter pricing structures significantly across key consumer and industrial products.
According to a notice from the KRA Commissioner of Domestic Taxes, imported sugar—excluding pharmaceutical imports and raw sugar designated for licensed refinery processing—will now attract an excise duty of Ksh 7.50 per kilogram, up from Ksh 5. This adjustment represents a notable increase aimed at generating additional revenue.
Cigarettes with filters will see an increase in excise duty to Ksh 4,100 per mille, up from Ksh 4,067.03, while plain cigarettes remain taxed at Ksh 2,926.41 per mille. Products containing nicotine or substitutes, intended for non-combustion inhalation or oral use, will now incur Ksh 2,000 per kilogram in duty, rising from Ksh 1,594.50 per kilogram. Conversely, liquid nicotine for electronic cigarettes will experience a reduction in duty from Ksh 100 to Ksh 70 per millilitre.
For imported sugar confectionery (tariff heading 17.04), the excise duty will double to Ksh 85.82 per kilogram from the previous Ksh 42.91. Alcoholic beverages have also been affected, with wines, fortified wines, and fermented fruit-based drinks now incurring duty at Ksh 22.50 per centilitre of pure alcohol instead of Ksh 243.43 per litre. Similarly, beer and low-alcohol beverages will face the same rate, moving away from the current charge of Ksh 142.44 per litre. Licensed small independent brewers, however, will benefit from a reduced rate of Ksh 10 per centilitre of pure alcohol.
Higher excise duties will also apply to spirits and liqueurs exceeding 6 per cent alcohol strength, now taxed at Ksh 10 percentilitre of pure alcohol, replacing the previous Ksh 356.42 per litre rate.
Additionally, imported self-adhesive plastics and plates, under specified tariff headings, will attract a revised duty of either 25 per cent or Ksh 200 per kilogram—whichever is higher—unless originating from East African Community (EAC) member states adhering to EAC Rules of Origin.
The betting and gaming industry will also see increased excise duties, with the rate on amounts staked or wagered raised to 15 per cent from 12.5 per cent. KRA emphasized the need for timely compliance, stipulating that betting and gaming taxes must be remitted within 24 hours after daily transactions. Alcoholic beverage manufacturers must submit payments by the fifth day of the following month, while other licensed entities are required to remit by the 20th of the following month.
These adjustments are expected to impact consumer spending and business operations across multiple sectors, reflecting the government’s drive to enhance revenue collection and streamline tax policy implementation.
