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Kenyans to pay more for cigarettes, juice, cosmetics

Treasury has proposed increased stamp duty on the products.

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by EMMANUEL WANJALA

News17 January 2023 - 13:12
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In Summary


  • • Stamp duty on fruit juices, whether or not they contain added sugar or sweeteners will be charged at Sh2.2 per stamp up from the current Sh0.6.
  • • Stamp duty on cigarettes containing tobacco, electronic cigarettes, liquid nicotine and  other nicotine delivery services will be Sh5 up from the current Sh2.8.
A smoker puffs at a cigarette.

Kenyans will have to dig deeper into their pockets to enjoy a puff of cigarette, quench their thirst with fruit juice or enhance their appearance with make up.

This is because the National Treasury has proposed to increase the stamp duty on cigarettes, fruit juices and cosmetics in the coming months.

In the proposals published by KRA, Treasury CS Njuguna Ndungu said stamp duty on cigarettes containing tobacco, electronic cigarettes, liquid nicotine for electronic cigarettes and other nicotine delivery services will be Sh5, up from the current Sh2.8.

He said stamp duty on fruit and vegetable juices, whether or not they contain added sugar or sweeteners will be charged at Sh2.2 per stamp up from the current Sh0.6.

The stamp duty applies to other non-alcoholic beverages except bottled water whose stamp duty will be retained at Sh0.5.

Ndungu however, said excise tax on cosmetics and beauty products will be increased from the current Sh0.6 to Sh2.5.

The Kenya Revenue Authority has invited the public to give their views on the proposed tax hikes by February 3.

The proposed increase of stamp duty on fruit juices and cosmetics is, however, a move from tradition where excise duty is normally charged on goods that fall under the 'sin tax'.

This is tax specifically levied on luxurious services and goods that are deemed harmful to humans such as alcohol, tobacco, drugs, candies, soft drinks, fast foods, coffee, sugar, gambling and pornography.

The essence of levying taxes on the goods is to increase their cost and help discourage their use.

The move to increase the excise duty appears to be in response to President William Ruto's directive to KRA, to double its revenue collection from Sh2.1 trillion to more than Sh4 trillion.

Last November, the President said increasing revenue collection would help the country ease its debt burden.

"I need help with our debt situation. I have agreed with KRA that as a country, we must move from Sh2.1 trillion to between Sh4-5 trillion,” he said.

"Countries in the middle-income category raise 20-25 per cent of their GDP from taxes. In Kenya, we are at 14 per cent."

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