More Pain for Consumers as KRA Adjusts Inflation on Specific Rates of Excise Duty 2021

Kenyans are set to pay more for bottled water, fuel, beer and juice starting October after the Kenya Revenue Authority (KRA) raised the excise duty rates on dozens of commodities in line with the rise in inflation recorded during the past year.

“Kenya Revenue Authority would therefore like to inform manufacturers and importers of excisable goods falling under the specific rate category and members of the public that the Commissioner-General will adjust the rates of Excise Duty using the average inflation rate for the Financial Year 2020/2021 of four decimal nine seven per centum (4.97%), as determined by the Kenya National Bureau of Statistics. The adjusted rates will be effective from 1st October, 2021.” The Authority  in a statement

KRA is required by the Excise Duty Act, 2015, to adjust the specific rates of excise duty of a group of select excisable products by taking into account the average inflation rate for the previous financial year.

The inflation rate for the financial year 2020/21 averaged 4.97 per cent, which the authority will use to tax the products, an increase from 4.93 per cent that was used last year, highlighting a rising cost of living for millions of Kenyans.

Households using kerosene for lighting and cooking will be the most affected after  KRA raised the excise duty rate on 1,000 litres of the commodity by Kes 565, which will see fuel importers pay Kes Sh11,936 in excise for kerosene, up from Kes 11,370.

The rise in prices is also set to see an increase in the price of buying a motorcycle by Kes 576, which will see motorcycle importers pay Kes 12,185 in excise up from the current Kes 11,608.

Smokers will also be among the most affected by the change in prices after KRA raised the excise duty on tobacco and its substitutes with excise on a unit of cartridges used in e-cigarettes reviewed to Kes 2,781 per unit, which is Kes 197 more from the current Kes 2,649.

Additionally, the price of fruit and vegetable juices will also increase by Kes 1 to Kes 12 from Kes 11, while excise on bottled water will also increase by the same quantity to Kes 6 from Kes 5 per litre.

KRA has invited interested public and stakeholders to submit their views on inflation adjustment of specific Excise Duty rates.

Read also; Finance Committee Rejects Tax on Bread and Motorcycles in Kes 3 Trillion Budget.

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