You will incur extra cost while purchasing Soda, beers and while enjoying boda boda rides. The Kenya Revenue Authorities has raised the duty charged on excisable goods, excluding fuel, by 4.97 percent to cover the inflationary erosion of collected taxes.
This is however on motion in the parliament as members are expected to champion the bill or overthrow it.
According to the law passed, which came into effect in January this year, the treasury cabinet secretary Ukur Yattani is expected to present the proposals for inflation adjustment in the Assembly house a week from the day of publication in a legal notice.
The August house will be required to consider and approve the gazette notice within 28 sitting days from the tabled date.
The taxman goes further and says that, “KRA would like to inform manufacturers and importers of excisable goods and the public that the rates of excise duty on excisable goods that have a specific rate of duty have been adjusted using the average inflation rate for the 2020/2021 financial year of 4.97 percent as required under the section 10 of the Excise duty Act 2015,”
He continues to say. “The adjusted rates are provided under legal notice Number 217 of 2021 and are effective from November 2.”
The adjustment is in line with the law that demands that excise duty be revised upwards in tandem with the cost of living measure or the average rate of inflation in the 12 months through June.
Industry lobby Kenya Association of Manufacturers (KAM) had consistently urged the taxman to pause implementation of the annual inflation adjustment tax that affects excisable goods, citing economic hardships as a result of the Covid-19 crisis.
Before 2018, the affected goods had fixed excise rates, and the new inflation adjustment is seen as a means of protecting the government’s spending power from being eroded by the rising cost of living.