Starting October, Kenyans will have to dig deeper into their pockets for bottled water, cigarettes, fuel, beer, and juice, among others.
This after the Kenya Revenue Authority(KRA) raised the rates of excise duty on dozens of commodities in line with the rising inflation recorded during the past year.
According to the Excise Duty Act, 2015, KRA is required 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.
This means manufacturers will pass on the additional cost of the commodities to consumers.
The rate of inflation for 2020/21 averaged 4.97 percent, which the KRA will use to tax the products, an increase from 4.93 percent that was used last 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 percent), as determined by the Kenya National Bureau of Statistics (KNBS). The adjusted rates will be effective from 1st October 2021,” KRA said.
Households that use kerosene are among those affected after the KRA raised the rate of excise duty on 1,000 litres of the commodity by Sh565, which will see fuel importers pay Sh11,936 in excise for kerosene, up from Sh11,370.
The taxman also raised the excise duty on tobacco and its substitutes with excise on a unit of cartridges used in e-cigarettes reviewed to Sh2,781 per unit, which is Sh197 more than the current Sh2,649.
The price of fruit and vegetable juices will also increase after excise charged on each litre was raised by Sh1 to Sh12, while excise on bottled water will also increase by the same quantity to Sh6 from Sh5 per litre.
The cost of buying a motorcycle will also increase from October after the KRA raised the price of purchasing a unit by Sh576, which will see motorcycle importers pay Sh12,185 in excise up from the current Sh11,608.