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Economy

Beer, cigarettes revenue drops on illicit trade

KRA commissioner-general John Njiraini.
KRA commissioner-general John Njiraini. FILE PHOTO | NMG 

Taxes from excisable goods such as beer, spirits and cigarettes for the year ended June dropped for the first time in close to half a decade, partly reflecting increased illicit trade.

The Kenya Revenue Authority (KRA) collected Sh162.48 billion from the sin taxes, which was a 1.81 per cent drop from Sh165.47 billion in the year ended June 2017, fresh statistics from the Treasury show.

The collections fell short of target by nearly Sh16.93 billion, the data released Friday indicate.

The drop has largely been attributed to a rise in production and sale of counterfeit and contraband products, a development that prompted the taxman to conduct a three-week awareness campaign earlier at start of the year.

Manufacturers, distributors, retailers, importers and police were sensitised on how to verify genuine alcoholic products using an app named “Soma Label” on their smartphones.

The campaign appeared to have helped the taxman turnaround a drop in revenue from alcohol and cigarettes — which account for more than 90 per cent of excise duty — in the first half of the financial year.

KRA commissioner-general John Njiraini had earlier in the year described as “unusual” the 16.3, 16.0 and 11.2 per cent fall in duty collected from beer, cigarettes and spirits, respectively, in the six months to December.

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