Cosmetics, liquor, fruit juices, and non-alcoholic beverages are set to become more expensive as the National Treasury has proposed to increase the current rates of excise duty stamps by 300 per cent.
The Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 propose to raise the stamp fees for cosmetics from 60 cents per stamp to KSh2.50, fruit juices and non-alcoholic beverages will go up by 267 per cent to KSh2.20 from 60 cents.
The cost of a stamp affixed on a beer bottle will double to KSh3 from KSh1.50, while those for wines, spirits and tobacco products are set for a 79 per cent rise to Sh5 from the current KSh2.80 per stamp.
The Kenya Revenue Authority (KRA) has invited the public to give their views on the proposed tax hikes by February 3.
This is the first review of the stamp prices since 2017.
Revenue performance for the first six months of FY 2022/2023
The latest Treasury data shows that total revenues by the end of November 2022 amounted to KSh893.8 billion, against a target of KSh912.9 billion.
“The revenue performance for the first six months of FY 2022/2023 continues to reflect the economic uncertainties in the country emanating from the adverse macroeconomic conditions and slowdown of economic growth,” Cytonn Investments noted in their commentary on National Treasury’s revenue and net expenditures for the first half of FY 2022/2023, ending December 30, 2022.
“The performance of revenue collection in the coming months will depend on how soon the Kenya Revenue Authority implements measures to scale up revenue collection, in line with the current administration’s target of Kshs 2.0 trillion by June 2023, equivalent to an additional Kshs 500.0 billion tax revenue and a further target of Kshs 1.1 trillion by June 2027.”
“The increased tax target is aimed at Income Tax, Value-Added Tax (VAT) and Exercise Duty and comes at a time when the business environment is still subdued.”
“We expect the subdued economic performance to persist in the short term as consumers continue to cut back on spending, given the high global commodity prices coupled with the persistent supply bottlenecks. This will negatively weigh down on revenue collection.”
