Tobacco industry leads KRA excise stamp sales

The British American Tobacco plant in Nairobi. FILE PHOTO | NMG
The British American Tobacco plant in Nairobi. FILE PHOTO | NMG 

The tobacco industry accounted for half of the total excise stamps issued last year to emerge the biggest sales stream for the taxman ahead of spirits and beer, latest data from Kenya Revenue Authority (KRA) shows.

Cigarettes accounted for 328.79 million excise stamps or 48 per cent of stickers issued in the period to June 2016, out of the 688.75 million sold.

This is the first time the KRA has publicly given data on the breakdown of excise stamps for each category of goods, offering investors and consumers are rare peek into the consumption of excisable goods.

In total, the KRA raked in Sh1.03 billion from excise stamp fees in the year to June 2016, from Sh890.2 million a year earlier and Sh701.6 million in 2014. This means cigarette makers such as British American Tobacco Kenya #ticker:BAT and Mastermind Tobacco paid out Sh493.19 million in stamp duty fees, given that each excise stamp was sold at a flat rate of Sh1.50 in the period under review.

Kenyans gulped 284.29 million bottles of hard liquor such as brandy, gin and vodka — whose alcohol content exceeds 10 per cent — the KRA data shows, raking in Sh426.43 million in tax revenue for the taxman. Hard liquor made up 41 per cent of total excise stamps issued in 2016.

The KRA slaps stamp fee on each retail unit of excisable products such as per bottle or can for beverages or per packet in the case of cigarettes.

Ready to drink spirits with alcohol content below 10 per cent were ranked third with a total of 60.65 million excise stamps issued to this category, according to the KRA statistics. Wines including fortified wines, and other beverages obtained by fermentation of fruits, were ranked one of the smallest contributors with 11.22 million stamps issued in 2016.

The taxman revealed that Kenyans guzzled 3.79 million bottles of beers, ciders and fermented non-alcoholic beverages last year, making this the smallest player in the stamps category. This category paid Sh5.68 million in excise stamp fees to the taxman.

Treasury secretary Henry Rotich last month doubled the excise stamps fees for cigarettes, wines, and spirits to Sh2.80 per sticker but lowered the rate to Sh0.60 per unit for juices and non-alcoholic drinks, Sh0.50 per stamp for mineral water.

Beers as well as spirits with less than 10 per cent alcohol content will continue paying Sh1.50 in excise stamps fees.