Some goods, such as beer, bottled water, and juice, may see price increases beginning October 1 as the Kenya Revenue Authority (KRA) moves to implement an annual inflation tax adjustment on excise duty charged on the products.
The taxman announced on Thursday that the excise duty on the products will rise by 6.3% beginning next month, in line with the average annual inflation rate.
“The specific rates will be adjusted using the average inflation rate for the financial year 2021/2022 of six decimal three per centum (6.3per cent), as determined by the Kenya National Bureau of Statistics, and the adjusted specific rates will be effective from October 1, 2022,” the KRA said.
The taxman invited the public to comment on the proposed changes by September 16.
Manufacturers will pass on the additional cost of the commodities to end users, which may enrage most households still reeling from the effects of the Covid-19 pandemic, which resulted in layoffs, pay cuts, and business closures.
The change is in accordance with the law, which requires excise duty to be raised in tandem with the cost of living index or the 12-month average rate of inflation.
However, various lobbies have consistently urged the taxman to halt implementation of the annual inflation adjustment tax that affects excisable goods since 2020, citing economic hardships caused by the Covid-19 crisis.
