FUEL SPARED FROM EXCISE DUTY TAX HIKE

Petroleum products have been spared from increases in excise duty on inflation adjustments by the Kenya Revenue Authority (KRA).

On Monday, KRA Commissioner General Githii Mburu said the pause in the yet to be published legal notice has been occasioned by the prevailing high cost of fuel products in the country.

“The only category we are going to leave out petroleum products because of the currently very high prices of fuel and we want to support Kenyans in ensuring the price of full doesn’t go higher,” he said.

“We will make the adjustment on all other excisable products.”

Fuel products including super petrol, diesel and kerosene were among 31 products set for excise duty adjustments at the rate of 6.3 per cent to cover average inflation across the completed 2022/2023 financial year.

All other 30 categories of excisable goods will attract high rates of excise duty in line with KRA adjustments.
The goods include fruit juices, bottled water, powdered beer, wines and spirits, beer, cigarettes, motorcycles and imported SIM cards.

The adjustments of the rates is against intense lobbying by the producers of the excisable goods against the increases.

Among those opposed to the adjustments was the Kenya Association of Manufacturers (KAM), Kenya Private Sector Alliance (KEPSA_ and the Alcohol Beverages Association of Kenya (ABAK).

Kenya Breweries Limited (KBL) for instance stated a further hike in excise taxes would lead to losses estimated at Ksh.588 million annually to 15,000 sorghum farmers who are tasked with producing key raw materials for the EABL affiliated brewer.

From January next year, KRA will have the leeway to exempt specified products from the inflation adjusted taxes by considering circumstances prevailing in the economy following changes made through the 2022 Finance Act.

While the allowance for exemption is expected in another three months, KRA has seemingly exercise the provision at present to cushion against further fuel price increases from the adjustment of excise duty rates.

Manufacturers/producers of other excisable goods had been hoping from the same favour from the tax man.

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