In Kenya, alcohol consumers are wired to expect price rises of their drinks in every budget cycle, and the manufacturers have in the past been successful at passing the higher costs on to them.
The 2022/23 fiscal year promises to be no different. Treasury CS Ukur Yatani has proposed to introduce an excise duty of 15 percent on fees charged by all television stations, print media, billboards, and radio stations to discourage the promotion of gambling, gaming, and alcohol.
These costs will surely reflect on your next beer bill in your favorite local.
“These habits are extremely addictive and can result in a variety of harmful repercussions, especially to the youth,” noted CS Yatani while presenting the Kes3.3 billion budget.
The higher taxes on gambling, gaming, and alcohol are packaged to help plug the Kes800 billion financing gap in the 2022/23 budget as the country struggles to sustain economic recovery post the pandemic.
The CS noted that advertisements of alcoholic beverages, betting, and gaming goes a long way in promoting these habits in society.
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Further, Kenyans are set to be hit with higher prices of cigarettes, fruit juice, chocolates, motorcycles, and bottled water after the Treasury proposed to increase the excise duty on these products by 10 percent.
Mr Yatani said the higher excise, which is separate from the annual adjustment for inflation, is meant to help the government raise an additional Kes50.4 billion in revenues.
In the new measures, however, the Treasury is seeking to exclude petroleum products from the increase, noting that high global crude prices have forced the government to spend billions of shillings monthly on subsidies to cushion the consumers.
At the moment, beer makers pay excise at the rate of Sh121.85 per liter, while filter cigarettes attract a levy of Kes3.47 per stick. The excise on bottled water and juice is charged at Sh6.03 and Sh12.17 per liter respectively.
Inflation is likely going to compound the rise in the prices of these commodities further, putting more pressure on Kenyans who are already struggling to keep up.
In the latest review, inflation rose to 5.6 percent in March up from 5.08 percent in February owing to the sharp increase in the prices of key items such as cooking gas, food, and fuel.