Petrol, water and beer prices shoot up

What you need to know:

  • The price of fuel and imported second hand cars and motorcycles has also gone up as the new Excise Duty Act takes effect.
  • Second hand motor vehicles that are less than three years old from the date of first registration will attract a duty of Sh150,000 a unit while those more than three years old will attract an excise duty of Sh200,000 a unit.
  • Henry Rotich defended the rise in excise taxes, saying it would promote the health of consumers and boost environmental protection.

Kenyans will from Tuesday pay more for fruit juices, cigarettes, beer, liquor, soda, bottled water and wine.

The price of fuel and imported second hand cars and motorcycles has also gone up as the new Excise Duty Act takes effect.

A litre of diesel will now cost Sh3.7 more, while that of petrol will go up by Sh10.3.

Bottled water will be costlier after an excise tax increase of Sh10 applies. 

Beer will attract an excise tax of Sh100 a litre. Powdered beer will also be charged a Sh100 a kilo.

Wines, including fortified wines, and other alcoholic beverages obtained by fermentation of fruits will also be costlier after a tax of Sh150 a litre is applied on them.

Spirits, liqueurs and other spirituous beverages of alcoholic strength exceeding 10 per cent will attract an excise tax of Sh175 a litre.

Electronic cigarettes, used by smokers trying to get rid of the habit, will not be spared either, after an excise tax of Sh3,000 per unit was slapped on them.

Cigarettes containing tobacco or tobacco substitutes will go up by Sh2,500 for a mill.

Second hand motor vehicles that are less than three years old from the date of first registration will attract a duty of Sh150,000 a unit while those more than three years old will attract an excise duty of Sh200,000 a unit.

Motorcycles will get pricier after a duty of Sh10,000 is applied. Plastic shopping bags will go up by Sh120 a kilo.

PROTECTING CITIZENS
Food supplements will attract a 10 per cent increase in duty.

The rise in the cost of the goods coincided with an increase in the cost of living for the month of November.

Figures released on Monday by the Kenya National Bureau of Statistics (KNBS) showed inflation rose to 7.32 per cent year-on-year in November from 6.72 per cent the previous month, driven by a jump in food prices.

KNBS said the food and non-alcoholic drinks index also increased by 1.08 per cent between October and November.

National Treasury Cabinet Secretary Henry Rotich, who had appointed December 1, 2015, as the date when the Act shall come into operation, defended the rise in excise taxes, saying it would promote the health of consumers and boost environmental protection.

“If we say we want our people not to drink sodas and the sugar-based juices so they do not become obese or not to drink alcoholic products so they can be productive, are we not doing the right thing?” asked Mr Rotich.

REVENUE DRIVEN
He said the tax had been crafted with a view to protecting Kenyans.

However, the view was swiftly dismissed as “theoretical” with experts insisting the cost of living will shoot up.

Ms Hadijah Nannyomo, an associate director at Ernst & Young, said excise taxes were “revenue driven” and will negatively affect ordinary Kenyans.

“The taxes will impact the ordinary Kenyan. To say they will not because they fall on sin taxes is very theoretical,” she told Daily Nation, adding that the State was using the excise tax regime to shore up its dwindling revenues.

Faced with a cash crunch, Treasury has resulted to hiking taxes to plug gaps in its revenue collections.