In a notice issued on Tuesday, August 10, the Kenya Revenue Authority (KRA) Commissioner said it would adjust the rate of excise duty using 4.97 per cent as the average inflation rate covering the 2020/21 financial year.
The adjustment is expected to have a direct impact on the cost of all excisable goods and services which include products such as fuel, beer, wine and spirits, food supplements, fruit juices, bottled water, cigarettes, and their substitutes, as well as motor vehicle imports.
Other services covered under excise duty include telephone and mobile internet services alongside fees charged for money transfer services by cellular phone service providers, banks, money transfer agencies, and other financial service providers.
The new adjustments are in line with the provisions of the 2015 Excise Duty Act which requires the new proposed taxes to be subjected to a process of public participation before being approved by National Treasury Cabinet Secretary Ukur Yatani.
The adjustment which is in line with provisions of the 2015 Excise Duty Act has now been subjected to stakeholder input through public participation ahead of the approval of the adjustment by National Treasury Cabinet Secretary Ukur Yatani.
“Kenya Revenue Authority would therefore like to inform manufacturers and importers of excisable goods falling under the specific rate category and members of the public that the Commissioner General will adjust the rates of Excise Duty using the average inflation rate of the Financial year 2020/2021 of four decimal nine seven per centum (4.97 %), as determined by the Kenya National Bureau of Statistics. The adjusted rates will be effective from 1st October 2021,” KRA Commissioner General stated.
The new tax adjustments are aimed at covering KRA against revenue spillages that might occur as a result of inflation.
On July 29, KRA in collaboration with YouTube began withholding 24 per cent of earnings made by Kenyan content creators on the platform.
These indicated how the taxman was determined to increase the tax bracket in the country.