Beer gets cheaper next door in Uganda, Tanzania on excise stamp fee cuts

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More Kenyans living at border points may find it pocket-friendly to cross into Tanzania and Uganda for a beer after the two countries doubled down on cuts on the prices of excise stamps, one of the cost components of the beverage.

Tanzania last month lowered the excise stamps affixed on excisable goods, including beer and spirits, pushing down the cost of producing a tipple in Kenya’s neighbour.

This is the second time Tanzania has lowered the price of excise stamps, even as Kenya plans to double the price in what is aimed at helping the Kenya Revenue Authority (KRA) offset a Sh4.5 billion the taxman owes SISCPA, the Swiss company contracted to manufacture the stamps.

In a public notice published on February 5, 2024, the Tanzania Authority (TRA) published new lower electronic tax stamp prices.

“In accordance with Regulation 6(2) of the Electronic Tax Stamps Regulation 2018 the Commissioner General of Tanzania Revenue Authority wishes to announce new prices (fees) for tax stamps following the successful completion of negotiations involving Tanzania Revenue Authority, Confederation of Tanzania Industries and the vendor SICPA SA,” reads the notice signed by TRA commissioner general Alphayo Kidata.

In Uganda, beer producers will pay Sh83 for a litre of malt beer made from homegrown raw materials will attract excise duty at the rate of 30 percent or Sh45 a litre, whichever is higher.

Consequently, manufacturers in Kenya now pay as much as four times in excise taxes on beer as in Uganda. Slightly over half of the cost of beer, about Sh97, is excise taxes compared to just Sh23.85 in Uganda, or 27 percent.

It is not any different in Tanzania where excise taxes will occupy about 36 percent, or Sh43.26, of the total cost of beer.

Prices of beer in Kenya have largely been pushed up by taxes, especially excise taxes, popularly known as the six tax. In Kenya, a litre of beer attracts Sh142.44 of excise duty while in Tanzania it is a maximum of Sh59.

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