The Kenya Kwanza Parliamentary Group has endorsed a proposal to increase taxes on manufacturers of alcoholic beverages with high alcohol content.
This decision was communicated by Molo MP Kuria Kimani, who chairs the National Assembly Committee on Finance and Planning responsible for reviewing the Finance Bill, 2024.
According to Kimani, the decision aligns with the government’s firm stance against the sale of alcohol in the country.
“To support the fight against alcohol brews in the country, we have proposed change in exercise duty, changing it from per volume to per alcohol content,” Kuria said.
Speaking at State House after President William Ruto chaired a PG meeting, Kuria said the review was necessary to reign in on the proliferation of liquor with very high alcohol content.
“Therefore those alcoholic manufacturers who are producing alcohol of high alcoholic content will be required to pay high duty based on alcohol content, those who produce alcohol of less alcoholic content will now pay less,” Kuria said.
The Finance Bill will undergo changes in how excise on beer, wine, and spirits is calculated, shifting to a method based on pure alcohol content, known as Alcohol By Volume (ABV).
This replaces the current flat excise rate. Under the proposed measures, the average rate will rise significantly, impacting 95% of the spirits portfolio. Data from the industry indicates that most consumption occurs at 40% ABV, with a 250ml size bottle priced under Sh300.
Consequently, consumers in this category will face the highest price increase, with compliant players seeing a rise of approximately Sh100 per 250ml for the most popular ABV, which is 40%.
