Kenyans to pay more for cigarette, liquor, motorbikes, beauty products
The Finance Bill, 2022, shows that the state targets higher taxes on motorcycles.
The sting of President Uhuru Kenyatta’s last Budget became clearer yesterday after Treasury Cabinet Secretary Ukur Yatani tabled detailed proposals of his 2022/23 expenditure.
The Finance Bill, 2022, shows that the state targets higher taxes on popular products, including motorcycles, cosmetics and beauty products, jewellery, beer, wines and spirits, chocolate, and bottled water to raise an additional Sh50.4 billion for the year starting July.
The excise duty charged on a motorcycle unit will be raised to Sh13,403.64 per unit, up from Sh12,185.16 currently, marking a 10 per cent jump that will impact the affordability of the two-wheelers popular with Kenyans seeking to beat traffic jams in congested towns and cities or tackle difficult terrains in rural areas without good roads.
This marks a double-blow for boda boda operators, who have also been included under compulsory third cover insurance, prompted by the rising number of accidents that have left many dead or injured and unable to pay hefty hospital bills. Cosmetic and beauty products, as well as jewellery, are also targeted, with the Finance ministry raising the excise duty on these products to 15 per cent from 10 per cent currently.
Bottled water will see a marginal rise on duty charged, with the Treasury proposing to impose a levy of Sh6.60 per litre up from Sh6.03.
Beer consumers
Beer consumers will dig deeper into their pockets as Mr Yatani proposed wide-ranging tax increases on various categories of alcoholic products. Excise duty on beer, cider, perry, mead, opaque beer, and mixtures of fermented beverages with non-alcoholic beverages and spirituous beverages of an alcoholic strength not exceeding six per cent will attract a tax of Sh134 per litre, up from Sh121.85 currently, indicating a jump of 9.97 per cent.
For wines, including fortified wines and other alcoholic beverages obtained by fermentation of fruits, the state targets to introduce a higher tax of Sh229 per litre, up from Sh208.20 presently.
The excise duty on spirits of undenatured ethyl alcohol, spirits liqueurs and other spirituous beverages of alcoholic strength exceeding six per cent will attract a higher Sh335.30 per cent per litre compared to Sh278.70 currently.
The state, however, plans to ease the pain for consumers of cigars, cheroots, cigarillos, containing tobacco or tobacco substitutes with a lower tax demand of Sh13,296.6 per kilogramme compared to Sh13,906.04 presently.
Consumers of plain cigarettes without filters, nevertheless, face the impact of higher taxation of Sh2,752.97 per mille, up from Sh2,502.74.
Other manufactured tobacco and manufactured tobacco substitutes and reconstituted tobacco, as well as tobacco extracts and essences, will attract a higher excise duty of Sh10,707.88 per kilo, up from Sh9,734.45 presently.
The Finance Bill shows that Mr Yatani steered clear of tax raises on critical products such as petroleum, as he sought to address the welfare of Kenyans stung by the high cost of living. The CS on Thursday said consumers will be spared annual price increases on a range of excisable goods like fuel, beer, motorcycles, and bottled water during hard economic times if MPs approve proposed changes to the Excise Duty Act.
The proposed amendments have empowered the Kenya Revenue Authority Commissioner-General Githii Mburu to exclude some products from annual inflation tax adjustments, depending on economic circumstances.
