The focus is on the National Treasury as it makes a final decision on its proposed tax raises on various consumer goods amid resistance by manufacturers and business groups.
Consultations and submission of comments on the draft Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 closed on Monday, leaving technocrats with the task of deciding on the fate of the new tax proposals.
“The comments and submissions are being reviewed by the technical teams and a decision will come in due course. There may be reviews in some areas or not depending on what the technical teams decide,” a source told Nation.
The Treasury had bowed to pressure from business groups including the Kenya Association of Manufacturers which are opposed to the new taxes and extended the period of consultations to February 21, 2023, from the initial February 7, 2023.
In the proposed tax changes, cosmetics, alcohol, cigarettes, and fruit juice consumers face higher prices of the commodities as the government chases more revenues.
The National Treasury targets at least 14 categories of excisable goods in new tax proposals, with the four – consumed by millions of Kenyans daily – topping the list of products it is proposing to increase excise fees on by up to 316.7 per cent.
In the proposed Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023, consumers of cosmetics and beauty products would now pay Sh2.5 for an excise stamp up from Sh0.6, cigarette and alcohol users Sh5 from Sh2.8 and fruit juices Sh2.2 from Sh0.6, Treasury proposes.
Cosmetics, beauty products
The cosmetics and beauty products consumers will be the most hit under the new proposals, with the proposed 316.7 per cent excise stamp fee increment.
The government has identified the cosmetics sector as a nascent source of revenue. The sector has recorded fast growth as millions of Kenyans grow interested in using cosmetic and beauty products, with official data showing that imports of essential oils and perfumes alone rose from Sh21.9 billion to Sh26.3 billion between 2017 and 2021.
Cigarette and alcohol users are set to be hit again with the 78.6 per cent proposed excise stamp fee increment following another increment in the Finance Act, 2022.
Alcoholic beverages such as wines and compounded spirits of alcoholic strength exceeding 6 per cent, will be charged Sh5 up from Sh2.8 also, beers will be charged Sh3 per stamp, double the Sh1.5 they were charged.
In the Finance Act, of 2022, Treasury increased excise duty on beauty and cosmetic products by 15 per cent, fruit, and vegetable juices by 10 per cent, wine, and beer by 10 per cent, and 20 per cent on spirits. BY DAILY NATION