Alcoholic beverage makers have opposed the 15 percent increase in excise duty on wines and spirits in this year’s budget, saying it is detrimental to the industry’s growth and will hurt the fight against illicit brews in the country.
The Alcoholic Beverages Association of Kenya (ABAK) said in a statement that such arbitrary tax hikes leave legitimate players in the industry facing uncertainty in their investments and business planning.
On top of the 15 percent hike, the excise is also due to be adjusted upwards in line with inflation at the beginning of the next fiscal year.
“The proposal by the CS also reverses the desired sense of predictability in taxation for the industry that came about with the introduction of the inflationary adjustment via the Excise Duty Act, 2015,” said Abak chairman Gordon Mutugi in a statement.
Treasury CS Henry Rotich said the higher excise was necessary in order to address the fall in excise revenue as a percentage of GDP from three percent in 2004 to two recent in the 2017/18 fiscal year.
The duty on a 750ml bottle of wine goes up by Sh18 to Sh136, while duty on a 750ml bottle of whisky goes up by Sh24 to Sh182.
He also put up the excise on cigarettes by 15 percent, while introducing a 10 percent duty on amounts staked on bets.