The Alcoholic Beverages Association of Kenya (ABAK) has objected to the government’s plan of increasing the excise stamp fees.
The Kenya Revenue Authority had earlier proposed a review of the excise Duty Regulations 2017 through The Excise Duty (Amendment) Regulations, 2023 which contain the new costs for the duty stamps as part of its measures to increase revenue collection.
With the proposed stamp fees, beers and ciders face a 100% increase from Sh1.50 to sh3, while wine and spirits face a 79% increase from sh2.80 to sh5.
The ABAK chairman Eric Githua however said the proposed increment will cause Kenyans to turn to illegal and illicit brews, considering the current economic conditions in the country.
The Association has requested that the National Treasury and KRA reconsider the excise stamp review, citing its unfairness to manufacturers and distributors of alcoholic beverages. This request is based on the fact that the review comes shortly after the Excise Duty increase due to inflation in October 2022.
Also Read: George Odhiambo Appointed New National Bank of Kenya MD
According to the Association, the high taxes on alcohol products has already resulted in a drop in legitimate alcohol sale and an increase in illicit alcohol, with statistics from WHO showing that 44% of alcohol sold in Kenya is illicit.
ABAK noted that while the Excisable Goods Management System was created to help deal with counterfeits and enhance the traceability of products, it has not been successful as KRA continues to grapple with the challenge of counterfeit excise stamps.
“There’s an increase in the number of products seized having fake stamps with a spike recorded in the months of November and December 2022,” said ABAK.
ABAK further suggested that the government adopt digital stamps as opposed to the current paper stamps especially with the current advancements in technology.