Excise duty receipts amounted to Sh17.1 billion in the month, according to the revenue statistics the Treasury shared with the Central Bank of Kenya (CBK), the highest since March when Kenya shut bars, pubs and night clubs.
The March 22 closure, which was part of measures to control the spread of Covid-19, resulted in significant disruption of alcohol value chain that heavily depended on bars and clubs.
The decision to reopen bars and allow restaurants to resume sale of alcohol from September 29 was followed by an increment in excise duty by 4.94 percent from October 1 in line with the average inflation rate for the year to June.
Reopening of bars and a tax raise in line with changes in inflation helped lift October excise duty collections to near pre-Covid levels, latest data from the Treasury show.
Excise duty receipts amounted to Sh17.1 billion in the month, according to the revenue statistics the Treasury shared with the Central Bank of Kenya (CBK), the highest since March when Kenya shut bars, pubs and night clubs.
The March 22 closure, which was part of measures to control the spread of Covid-19, resulted in significant disruption of alcohol value chain that heavily depended on bars and clubs.
The decision to reopen bars and allow restaurants to resume sale of alcohol from September 29 was followed by an increment in excise duty by 4.94 percent from October 1 in line with the average inflation rate for the year to June.
Alcohol and cigarettes, largely sold in bars and restaurants, are the largest contributors to the excise duty receipts, accounting for more than three quarters of the collections.
The Kenya Revenue Authority, for instance, charges Sh265.50, Sh198.34 and Sh116.08 per litre of spirit, wine and beer, respectively. A stick of cigarette with filter attracts a duty of Sh3.31.
The excise duty receipts in October were, however, 4.57 percent lower than a similar month in 2019 when Sh17.92 billion collections were reported.
The year-on-year fall occurred despite tax now being applied to non-alcoholic beverages like bottled water and juices unlike a year ago, partly reflecting the impact of Coronavirus restrictions on social gatherings such as weddings and burials on consumption of soft drinks.
Treasury secretary Ukur Yatani in September lowered the excise duty target for the current year ending June 2021 to Sh195.6 billion from Sh241.4 billion on the back of prolonged restrictions of social gatherings.
Data shows the taxman had received Sh64.45 billion, or a third of the revised full-year target, in the first four months of the financial year through October compared with Sh67.64 billion for a similar period a year ago.
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