The Kenya Revenue Authority (KRA) has announced the implementation of new and revised excise duties under the Finance Act, 2025.
The changes, which took effect on 1st July 2025, affect a wide range of imported goods and services, from packaging materials and plastics to digital transactions and alcoholic beverages.
Under the new law, several imported goods will now attract excise duty for the first time.
They include forms of plastic and polymer sheets, unbleached kraft paper, aluminium profiles, and fully built or semi-built direct air capture machines.
Additionally, virtual asset transactions, including cryptocurrency, will now be taxed at 10% of their value, making Kenya one of the few African countries to formalise excise taxation on digital assets.
Also added to the list is a Ksh500 per litre excise duty on spirits with alcohol content exceeding 90%, specifically targeting ultra-high-strength alcoholic beverages.
KRA Announces Adjustments to Existing Excise Taxes
On the other hand, several existing excise duties have been increased or restructured.
For instance, imported packaging paper products, glass, and ceramic tiles will have higher specific duties based on weight or area, replacing previous flat-rate percentage values.
Additionally, gambling and digital betting will have different tax computation. Instead of taxing 15% of the amount wagered, the law now imposes a 5% tax on the amount deposited into gaming and betting wallets.
KRA has explained that the measures aim to enhance revenue collection, protect local industries, and streamline taxation in line with evolving economic realities.
Also Read: KRA Breaks Down How Kenyans Paid Ksh2.5 Trillion in Taxes
New Excise Duties Introduced (Finance Act, 2025)
| No. | Excisable Item/Service | Tariff Heading | New Excise Duty Introduced |
|---|---|---|---|
| 1 | Self-adhesive plastic films/sheets | 3919.90.90 | 25% or Ksh200/kg |
| 2 | Laminated plastic sheets | 3920.10.90 | 25% or Ksh200/kg |
| 3 | Printed polymers of PVC | 3920.43.90 | 25% or Ksh200/kg |
| 4 | Printed polycarbonates/polyesters | 3920.62.90 | 25% or Ksh200/kg |
| 5 | Cellular plastic sheets | 3921.19.90 | 25% or Ksh200/kg |
| 6 | Imported tea (flavored or not) | N/A | 25% of excisable value |
| 7 | Unbleached kraft paper (≤150g/m²) | 4804.31.00 | 25% or Ksh50/kg |
| 8 | Kraft paper (>150g/m² ≤225g/m²) | 4804.41.00 | 25% or Ksh50/kg |
| 9 | Kraft paper (>225g/m²) | 4804.51.00 | 25% or Ksh50/kg |
| 10 | Processed glass (engraved, drilled, etc.) | 7003/7004/7005 | 35% or Ksh500/sq. metre |
| 11 | Safety glass | 7007.19.00/7007.29.00 | 35% or Ksh500/sq. metre |
| 12 | Multiple-walled insulating glass | 7008 | 35% or Ksh500/sq. metre |
| 13 | Direct air capture machines | N/A | 25% of excisable value |
| 14 | Aluminium profiles & fabricated doors/windows | 7604/7608.20/7610.10 | 25% or Ksh400/kg |
| 15 | Non-refillable lighters | 9613.10.00 | 25% or Ksh500/kg |
| 16 | Spirits exceeding 90% alcohol | N/A | Ksh500 per litre |
| 17 | Virtual asset transactions | N/A | 10% of excisable value |
Adjusted Excise Duty Rates – Finance Act 2025
| No. | Item/Service Description | Tariff Heading | Old Rate (before 01/07/2025) | New Rate (from 01/07/2025) |
|---|---|---|---|---|
| 1 | Imported paper or paperboard labels (printed or not) | 4821.10.00 / 4821.90.00 | 25% or Ksh150/kg (whichever is higher) | 25% or Ksh200/kg (whichever is higher) |
| 2 | Imported cartons, boxes, cases (corrugated or not), skillet packs | 4819.10.00 / 4819.20.10 / 4819.20.90 | 25% | 25% or Ksh200/kg (whichever is higher) |
| 3 | Imported glass bottles (excluding those for pharmaceuticals) | — | 35% | 35% or Ksh40/kg (whichever is higher) |
| 4 | Imported ceramic flags, tiles, finishing ceramics | 6907 | 5% of custom value or Ksh200/sq. metre | 5% or Ksh300/sq. metre (whichever is higher) |
| 5 | Printed self-adhesive paper (excluding EAC origin) | 4811.41.90 | 25% or Ksh150/kg | 25% of excisable value or Ksh200/kg (whichever is higher) |
| 6 | Gummed paper and paperboard (excluding EAC origin) | 4811.49.00 | 25% or Ksh150/kg | 25% or Ksh200/kg (whichever is higher) |
| 7 | Imported float glass, surface ground/polished glass (excluding some industrial use cases) | 7005 | 35% of custom value or Ksh200/kg | 35% of excisable value or Ksh500/sq. metre (whichever is higher) |
Also Read: KRA Announces New Interest Rates for Employee and Company Loans
Excise Services: Adjusted Tax Computation Method
| No. | Service Description | Old Excise Duty (before 01/07/2025) | New Excise Duty (from 01/07/2025) |
|---|---|---|---|
| 1 | Betting (excluding horse racing) | 15% of amount wagered or staked | 5% on amount deposited into betting wallet |
| 2 | Gaming | 15% of amount wagered | 5% on amount deposited into gaming wallet |
| 3 | Prize competitions | 15% of amount paid to participate | 5% of participation fee |
| 4 | Lottery (excluding charitable) | 15% of amount paid for ticket | 5% of ticket cost |
What Next for Kenyans
Consequently, manufacturers, importers, and digital service providers are required to obtain excise licenses and charge the new excise duty rates on all relevant transactions.
For alcoholic beverages, excise returns must be filed by the 5th day of the following month, while for other goods and services, returns are due by the 20th of the following month.
The new taxes are expected to affect construction, packaging, digital trading, alcohol manufacturing, and gaming industries.
Also, businesses may pass some of the cost burden to consumers, which could lead to higher retail prices on affected goods and services.
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