Market News

Beer, cigarette prices to rise every two years starting July

National Treasury secretary Henry Rotich. file photo | nmg
National Treasury secretary Henry Rotich. file photo | nmg 

Prices of beer, cigarettes, bottled water and fruit juices will automatically rise every two years if proposed amendments in the Finance Bill set for debate tomorrow in Parliament are passed into law.

The price increases, which will be pegged on the average inflation rate in the 12 months preceding the bi-annual review, could come into force as soon as this July.

The Excise Act currently gives the Treasury and the Kenya Revenue Authority powers to effect inflation-based tax increases every year but the amendment, if passed, will see the adjustment frequency changed to two years.

The inflation tax has never been implemented since the Excise Act was passed in 2013, as the Treasury chose to forego revenue for fear of raising prices of basic commodities beyond consumers’ reach.