Alcohol consumers in Kenya face hard days with increased tax

NAIROBI-The annual tax increment on alcoholic drinks will be a setback for consumers who are already grappling with high food and fuel prices.

“If disposable income is challenged through taxation, then the bottom of the pyramid will hurt the most,” Kenya Breweries Limited managing director Jane Karuku said.

According to the beer maker, increasing an already difficult ta ase ill ma e it harder for the consumer, chasing them to illicit brews and eroding recent gains from reinforcement

This will further endanger lives and deny the government revenues it is already making from regulated alcohol consumption.

A research by the AntiCounterfeits Agency shows about 49.6 per cent of Kenyans by counterfeit goods knowingly because they are much cheaper.

Karuku said this will also erode the gains made in increasing the ease of doing business in the country.

“A tax shock would be counter-productive for business and hiking things such as corporate tax to 35 percent would be a shock to businesses,” she said.

Last year Treasury introduced changes to the law, and Excise Duty will now be reviewed annually, with the rate pegged to the average rate of in ation for the past year.

With the prolonged dry eather enya s in ation is set to rise in the following months driven by high food and fuel prices. As a result, this may increase the firm s tax rate which is currently at 30 per cent. The company presented its proposals after Treasury asked for contributions from the public and interested parties as the government prepares its udget for the ne t financial year.