Millions of consumers of beauty products such as wigs and false beards and eyebrows in the country could pay more for the items if the proposal to introduce a five percent excise duty on their value is adopted.
The Finance Bill 2023 is also seeking to introduce a tax on human hair, eyelashes, switches and artificial nails in a move that will raise the prices of these beauty products whose usage is on the rise.
Proposed new taxes introduced include a Sh100,000 per metric tonne of imported fish or 20 percent of the value, whichever is higher.
Powdered juice will be taxed at Sh25 per kilogramme while sugar, excluding that imported or locally purchased by a registered pharmaceutical manufacturer, will attract a Sh5 tax per kilogramme.
Items such as wigs and false beards and eyebrows, which are mostly imported, have grown in popularity.
The move will be a double blow for the beauty sector which is also set to see a rise in the excise stamp charges for beauty and cosmetic products from Sh0.6 to Sh2.5 per stamp, being a 316 percent hike.
The Kenya Revenue Authority (KRA) intends to roll out excise stamps for the products starting on July 1 as contained in the Excise Duty (Excisable Goods Management System- EGMS) (Amendment) Regulations, 2023, that were published early in the year.
The High Court in March dismissed a case by the Law Society of Kenya (LSK) seeking to stop the KRA from implementing the increase in excise stamp rates on the products.
Gacheri Mugao, the chairperson of the Kenya Association of Manufacturer’s Cosmetics and hygiene sub-sector, had cautioned that the rise in excise duty will increase the tax burden to untenable levels and subsequently make these products unaffordable to consumers.
The taxman’s growing interest reflects a rapid growth that has been witnessed in Kenya’s beauty industry— both in local manufacturing and imported products —that provides a new revenue stream for a government keen to grow taxes.
Official data show the industry has grown by over Sh10 billion over the past decade as more Kenyans embrace the use of makeup and other beauty products.