MPs freeze tax waiver plan on Senator beer

Parliament has made an about-turn on its earlier promise to recommend a tax waiver on low-cost beer Senator Keg.

The change in decision may serve a body blow to East Africa Breweries Limited.

The vice-chairman of parliamentary Finance, Trade and Planning committee, Mr Nelson Gaichuhie, said the tax waiver would have ended up benefiting EABL at the expense of other brewers.

“We consulted other stakeholders and they expressed their concerns on which they thought they should be given remissions… the committee decided not to be one-sided,” he said.

SPIRITED LOBBYING

Two weeks ago, the parliamentary budget office suggested reinstatement of excise tax remission on Senator Keg in the face of decreased consumption due to high cost.

The suggestion followed spirited lobbying by EABL which argued that the 50 per cent tax imposed on the brand in 2012 had resulted in a massive slump in sales as well as closure of 5,000 retail stores.

Mr Gaichuhie, however, said the committee consulted other brewers who had also requested similar tax remissions on their brands.

The companies, however, failed to prove that they use locally available inputs in their production to warrant tax remissions.

This effectively meant that EABL would be the sole beneficiary of the waiver as it produces Senator Keg using sorghum.

Mr Gaichuhie said that it emerged to the lawmakers that by recommending duty remission on Senator Keg, the House would be dragged into the wars of alcohol makers.

“They had their own industrial wars and we decided that everybody has their own way and means of making cheap brew,” he said.

Last week, EABL rival Keroche Industries petitioned Parliament to develop a sustainable taxation regime as opposed to zero rating duty.