By Emmanuel Nduka
Starting December 27, 2024, Kenyans will experience higher prices for various goods, as the Kenya Revenue Authority (KRA) raises excise duty rates following the enactment of the Tax Laws (Amendment) Act, 2024.
President William Ruto signed the amendments into law to help boost the country’s revenue collection. The revised tax structure will impact both essential and luxury products.
Excise Duty Increases on Key Products
Among the most notable changes, imported sugar will see an excise duty hike from KSh 5 to KSh 7.50 per kilogram. Cigarettes will also become more expensive, with both filtered and unfiltered varieties attracting a higher excise duty of KSh 4,100 per mille, up from the previous rates.
Nicotine products will face a new tax of KSh 2,000 per kilogram, an increase from KSh 1,594.50, while liquid nicotine will rise from KSh 70 to KSh 100 per milliliter.
Alcoholic beverages will be hit as well, with wines and spirits facing an excise duty of KSh 22.50 per centiliter of pure alcohol, up from KSh 243.43 per liter.
Tax Hike on Other Goods and Services
Other goods will also be affected, such as plastic products, which will now carry a 25% excise duty or KSh 200 per kilogram. The new law excludes products originating from East African Community (EAC) states.
The betting and gaming sectors will also feel the strain, with a rise in excise duty from 12.5% to 15% on the amounts wagered.
Impact on the Market and Local Industries
Economist Daniel Kathali predicts that the increased taxes will push up the cost of goods, as suppliers pass the burden onto consumers. However, he notes that local manufacturers, particularly in sectors like sugar, could benefit from the new excise duties on imports.
“The price hikes might boost local production, as Kenyan manufacturers can compete more effectively with imported products,” Kathali explained.
New Products Subject to Excise Duty
KRA also released a list of additional products now subject to excise duties. These include electric transformers (25%), imported printing ink (15%), and ceramic sinks (5% of custom value). Other items like coal, surface glass, and various plastics will also see new tax rates.
Manufacturers and importers must comply with licensing and tax remittance requirements, with the first payments due by January 20, 2025.
