Consumers Federation of Kenya (Cofek)

Kenyans unhappy with over 300% tax increase on alcohol, cosmetics

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Kenyans reacted angrily to proposals by the Kenya Revenue Authority (KRA) to enhance the current stamp tax by over 300 percent on alcohol, bottled water and cosmetics.

Consumers bear the brunt of it all as all the price add-ons are always passed onto consumers.

Accordingly, a price increase on alcohol, juices, cosmetics and cigarettes is inevitable if a proposal by the National Treasury to raise the price of excise stamps by up to four times is approved.

The Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 proposes to raise the stamp fees for cosmetics from 60 cents per stamp to Sh2.50 — a margin of 317 percent.

The stamp fee for fruit juices and non-alcoholic beverages such as sodas will go up by 267 percent to Sh2.20 from 60 cents.

The cost of a stamp affixed on a beer bottle will double to Sh3 from Sh1.50, while those for spirits, wines and tobacco products are set for a 79 percent rise to Sh5 from the current Sh2.80 per stamp.

The EGMS, owned by a single-sourced Swiss contractor, was controversially introduced in 2011.

‘Cofek is opposed to the move to increase taxation because it will drive the products to the black-market where consumers will pay high prices while government will collect less revenue. The move will boost illicit trade’, said Stephen Mutoro who is the Cofek Secretary General and Chairman at the Stop Crime Kenya (StoCK)

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